Mapping the Links Between ASEAN and the GMS, BIMP-EAGA, and IMT-GT

Regional and subregional program links Mapping the links between ASEAN and the GMS, BIMP-EAGA, and IMT-GT

ISBN 978-92-9254-202-3 (Print), 978-92-9254-203-0 (PDF) Publication Stock No. RPT135922-2

Cataloging-In-Publication Data

Regional and Subregional Program Links: mapping the links between ASEAN and the GMS, BIMP-EAGA, and IMT-GT Mandaluyong City, Philippines: Asian Development Bank, 2013.

1. Regional cooperation and integration. 2. ASEAN. 3. GMS. 4. BIMP-EAGA. 5. IMT-GT. I. Asian Development Bank.

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Printed on recycled paper Contents

Foreword...... v V. SUMMARY OF MAJOR FINDINGS...... 83 Acknowledgements...... vi Major Findings ...... 83 Abbreviations...... vii Strengthening Strategic and Institutional Links ...... 86

Executive Summary...... ix VI. cONCLUSIONS ...... 88 Introduction...... ix Approach Adopted...... ix APPENDIXES ...... 90 Key Findings...... x A. Selected ASEAN Highway Network Sections Strengthening Strategic and Institutional Links...... xi in the ASEAN Strategic Transport Plan Located in Subregional Corridors in the GMS, BIMP-EAGA, I. INTRODUCTION ...... 1 and IMT-GT...... 90 B. Committees under the Purview of ASEAN Economic II. ratiONALE FOR PROMOTING LINKS Ministers ...... 93 aND IMPROVING COORDINATION...... 3 C. Memorandum of Agreement Between the ASEAN, GMS, BIMP-EAGA, and IMT-GT...... 3 Association of Southeast Asian Nations Promoting Links and Improving Coordination ...... 4 and the Asian Development Bank...... 96 D. Business Organizations Affiliated with ASEAN...... 106 III. STRATEGY AND PROGRAM LINKS ...... 6 E. Review of ADB-Supported Capacity Building Approach to Strategy Mapping ...... 6 Technical Assistance to ASEAN, GMS, Review of Program-Wide Strategies ...... 6 BIMP-EAGA, and IMT-GT...... 106 Findings and Observations: Strategy Level Review ...... 13 TABLES Operational Level Review of Selected 1 Master Plan on ASEAN Connectivity Pillars Sector Initiatives ...... 16 and Component Strategies ...... 8 Transport Connectivity...... 16 2 ASEAN Strategic Transport Plan, 2011–2015: Energy Connectivity...... 35 Goals, Strategic Thrusts, and Key Actions ...... 17 Transport and Trade Facilitation...... 42 3 Development Strategies of Priority Subregional Findings and Observations: Operational Corridors ...... 19 Level Review ...... 48 4 Number of ASEAN Highway Cross-Border Links between Member States...... 22 IV. iNSTITUTIONAL COORDINATION AND LINKS ...... 53 5 Ferry Links in ASEAN Members States in the ASEAN Review of Institutional Arrangements Highway Network ...... 22 and Mechanisms ...... 53 6 ASEAN Highway Network Routes in the MPAC In-Country Institutional Arrangements...... 71 and ASTP, 2011–2015 for Construction Comparative Assessment of Institutional and Upgrading, and their Inclusion in the GMS, Mechanisms and Arrangements ...... 74 BIMP-EAGA, and IMT-GT Programs ...... 23 Enhancing Institutional Coordination ...... 78

contents iii 7 Cross-Border Rail Links Before and After BOXES the Singapore−Kunming Rail Link ...... 24 1 Priority Projects in the Master Plan on ASEAN 8 Missing Links in the Singapore−Kunming Rail Link ... 25 Connectivity ...... 9 9 ASEAN Maritime Transport Cooperation Goals 2 Greater Mekong Subregion Strategic Frameworks I and Strategies for 2011–2015...... 27 and II: Vision, Goals, and Strategic Thrusts...... 10 10 Designated Ports in the ASEAN Transport Network .... 27 3 BIMP-EAGA Roadmap to Development and 11 ASEAN-Designated Ports Located in Implementation Blueprint: Goals, Pillars, the BIMP-EAGA, IMT-GT and GMS Subregional and Strategic Thrusts...... 12 Programs ...... 28 4 IMT-GT Roadmap and Implementation Blueprint: 12 ASEAN Multilateral Agreement in Air Services: Vision, Goals, and Strategic Thrusts and Sectors...... 14 Designated Points in BIMP-EAGA, IMT-GT, 5 Alternative Railway Routes in the Greater Mekong and CLMV under Protocols 1–6 on the 3rd, Subregion ...... 26 4th, and 5th Freedoms of the Air ...... 34 6 ASEAN Single Aviation Market ...... 32 13 Energy Sector Strategies of ASEAN, GMS, 7 Limitations of the GMS Cross-Border Transport and BIMP-EAGA ...... 37 Agreement Customs Transit System ...... 45 14 Status of ASEAN Power Grid ...... 39 8 Measures for the Enhancement of the BIMP-EAGA 15 Status of Ratification for ASEAN Transport Memorandums of Understanding on Air and Sea Facilitation Agreement (as of 12 April 2013) ...... 43 Linkages, and Commercial Buses and Coaches ...... 47 16 Main Features of the BIMP-EAGA Memorandums of Understanding on Air Sea Linkages FIGURES and Commercial Buses and Coaches ...... 46 1 Two-Tiered Approach to Strategy Mapping...... 7 17 Operational Level Links between ASEAN, GMS, 2 Subregional Program Strategies with Reference BIMP-EAGA, and IMT-GT in Selected to ASEAN ...... 15 Connectivity Areas ...... 50 3 Basic GMS Organization Structure ...... 53 18 GMS Ministers and National Coordinators ...... 54 4 GMS Organizational Framework ...... 55 19 Sectoral Bodies and Sectors under the ASEAN 5 IMT-GT Institutional Framework ...... 58 Community Councils ...... 65 6 BIMP-EAGA Institutional Structure ...... 61 20 ASEAN Country Coordinators for Dialogue Partners .... 67 7 BIMP-EAGA Clusters ...... 62 21 Country Membership in Selected Regional and 8 BIMP-EAGA Revised Institutional Structure Subregional Groupings...... 72 (effective 1 January 2013)...... 64 22 Focal Ministries or Agencies for ASEAN and Related 9 Implementation Arrangements for the Master Plan Subregional Groupings ...... 72 on ASEAN Connectivity ...... 66 23 Key Institutional Features of ASEAN, GMS, 10 ASEAN Secretariat Organizational Structure ...... 68 BIMP-EAGA, and IMT-GT Programs...... 75 24 Mapping of Principal Bodies of ASEAN, GMS, BIMP-EAGA, and IMT-GT...... 77 25 Enhancing Coordination Methods and Processes...... 82

iv Contents Foreword

The Association of Southeast Asian Nations (ASEAN) is GMS, BIMP-EAGA, and IMT-GT in support of ASEAN’s central to economic integration among a diverse group of wide-ranging regional integration agenda under the AEC countries in Asia. ASEAN’s aspirations are enshrined in Blueprint. The study assessed the existing and potential ASEAN Vision 2020, which envisages the realization of an links among ASEAN and the three subregional programs, ASEAN Community by 2020 built on three interrelated as well as gaps in coordination mechanisms across the pillars—economic, socio-cultural, and political-security. programs. This study was the first to review the strategic The ASEAN Member States have decided to accelerate and institutional linkages among them, and its findings the establishment of the ASEAN Community to 2015, and recommended approaches can contribute toongoing with the signing of the ASEAN Economic Community dialogue about enhanced coordination. (AEC) Blueprint. We gratefully thank the Government of Australia for With 2015 fast approaching, the ASEAN Member States are the financial support that made the study possible. taking concerted efforts to implement their commitments The preparation of the report greatly benefitted from a under the AEC Blueprint. Substantial progress has been wide range of views and information gathered during achieved, but there are still many measures that need to consultations with government and other stakeholders be implemented up to and after 2015 to complement in the ASEAN Member States, the secretariats of the the “top-down” approach being taken by ASEAN with three subregional programs, and the ASEAN Secretariat. the “bottom-up” approaches exemplified by the Greater Comments and suggestions on the findings and Mekong Subregion (GMS), Brunei Darussalam− recommended approaches were also obtained at a regional Indonesia−Malaysia−Philippines East ASEAN Growth workshop in November 2012. Area (BIMP-EAGA), and Indonesia−Malaysia−Thailand Growth Triangle (IMT-GT). We hope this study contributes to the discussion on closer coordination and cooperation between ASEAN and the This study explores the potential benefits of promoting GMS, BIMP-EAGA, and IMT-GT. closer links and improving coordination between ASEAN,

James A. Nugent Director General, Southeast Asia Department Asian Development Bank

foreword v Acknowledgments

The preparation of this report was coordinated by a team ADB resident missions in Cambodia, the Lao People’s in the Regional Cooperation and Operations Coordination Democratic Republic (LRM), Thailand (TRM), and Division (SERC), Southeast Asia Department (SERD), Viet Nam (VRM) provided invaluable support for the at the Asian Development Bank (ADB). The study was study. The staff in CARM were Peter Brimble, senior implemented through TA 7718-REG: Promoting Links country economist; Chantha Kim, former programs and Improving Coordination Among the Greater Mekong officer; Phalla Kong, senior operations assistant; and Subregion (GMS), the Brunei Darussalam–Indonesia– Vanna Sin, operations assistant. Staff in LRM included Malaysia–Philippines East ASEAN Growth Area (BIMP- Barend Frielink, principal country economist. In TRM EAGA), the Indonesia–Malaysia–Thailand Growth Triangle were Winfried Wicklien, principal country specialist; and (IMT-GT), and the Association of Southeast Asian Nations Phairoj Phongsombutvara, senior operations assistant. In (ASEAN); and financed by the Government of Australia. VRM were Yumiko Tamura, principal country specialist; Anh Hong Nguyen, associate programs officer; and Lan Rhodora B. Concepcion, institutional coordination Thi Hoang Nguyen, associate project analyst. specialist (former regional cooperation specialist in SERC), led the study, with overall guidance from Arjun Consultants were primarily responsible for the preparation Goswami (former director, SERC). Technical guidance was of the report. They include Carolina S. Guina, who was contributed by Eric Sidgwick, country director, Cambodia responsible for the strategy component of the study, and Resident Mission (CARM), and former principal regional Filologo Pante, Jr. for the institutional component. Marissa cooperation specialist; and Pradeep Srivastava (former Espiritu provided technical and logistical support to the senior regional cooperation specialist, SERC). Richard Bolt, study, and Leticia D. de Leon and Kevin Donahue edited advisor, provided useful comments. Technical assistance was the report. Thomas Crouch served as resource person provided by Ma. Theresa Bugayong, associate operations during the regional workshop held on 27 November 2012 officer (resource planning); Josephine Duque-Comia, in Bangkok, Thailand. senior programs officer; and Ma. Paz Manaligod, associate programs officer. The staff who helped with administrative Inputs and feedbacks were also extremely important in support were Natalie Escano and Cira Rudas, in SERC; the study and in the report. Gratefully acknowledged Elaeza Abellar-Ladao, in the Office of the Director General; are Rony Soerakoesoemah, in the ASEAN Secretariat; and Utami Hendrarini, in the Indonesia Resident Mission. the GMS national coordinators and their staff; and the BIMP-EAGA and IMT-GT senior officials, and regional and national secretariats.

vi regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Abbreviations

ADB – Asian Development Bank CLMV – Cambodia, the Lao People’s Democratic ACMECS – Ayeyawady–Chao Phraya–Mekong Republic, Myanmar, and Viet Nam Economic Cooperation Strategy CMEA – Coordinating Ministry for Economic ACC – ASEAN Coordinating Council Affairs AEC – ASEAN Economic Community CPR – Committee of Permanent AEM–METI – ASEAN Economic Ministers–Ministry Representatives of Economy, Trade and Industry CTS – Customs Transit System AFTA – ASEAN Free Trade Area EPU – Economic Planning Unit AHN – ASEAN Highway Network ERIA – Economic Research Institute for AMBDC – ASEAN–Mekong Basin Development ASEAN and East Asia Cooperation EWEC – East–West Economic Corridor AFAFGIT – ASEAN Framework Agreement for the GMS – Greater Mekong Subregion Economic Facilitation of Goods in Transit Cooperation Program AFAFIST – ASEAN Framework Agreement on the GMS-BF – GMS Business Forum Facilitation of Inter-State Transit GSSC – Greater Sulu Sulawesi Corridor AFAMT – ASEAN Framework Agreement on IAI – Initiative for ASEAN Integration Multimodal Transport ICT – information and communication AMEICC – Economic and Industrial Cooperation technology Committee IMT-GT – Indonesia–Malaysia–Thailand Growth APG – ASEAN Power Grid Triangle APSC – ASEAN Political–Security Community JBC – Joint Business Council ASAM – ASEAN Single Aviation Market JTD – Joint Tourism Development ASCOPE – ASEAN Council on Petroleum Lao PDR – Lao People’s Democratic Republic ASEAN – Association of Southeast Asian Nations LCC – low cost carrier ASEC – ASEAN Secretariat LGF – Local Government Forum ASTP – ASEAN Strategic Transport Plan MAAS – Multilateral Agreement on Air Services BEBC – BIMP-EAGA Business Council MINDA – Mindanao Development Authority BIMP-EAGA – Brunei Darussalam–Indonesia– MITI – Ministry of Trade and Industry Malaysia–Philippines East ASEAN MM – ministerial meeting Growth Area MNPED – Ministry of National Planning and BIMP-FC – BIMP Facilitation Centre Economic Development CBTA – Cross-Border Transport Agreement MOC – Ministry of Commerce CIMT – Centre for IMT-GT Subregional MOFA – Ministry of Foreign Affairs Cooperation MOFAT – Ministry of Foreign Affairs and Trade CIQS – customs, immigration, quarantine, and MOIC – Ministry of Industry and Commerce security MOU – memorandum of understanding MPAC – Master Plan on ASEAN Connectivity

abbreviations vii MPI – Ministry of Planning and Investment SKRL – Singapore–Kunming Rail Link MRC – Mekong River Commission SMEs – small and medium-sized enterprises NCSS – nonconventional-sized ships SMED – SME Development Cluster NDG – narrowing down the development gap SOM – senior officials meeting NESDB – National Economic and Social TA – technical assistance Development Board TAGP – Trans-ASEAN Gas Pipeline NRD – Natural Resource Development Cluster TIICTD – Transport, Infrastructure, and ICT NSEC – North–South Economic Corridor Development Cluster NTO – national tourism organizations TIR – Transit International Routier PRC – People’s Republic of China TTR – transit transport routes RoRo – roll-on/roll-off VPOA – Vientiane Plan of Action SEC – Southern Economic Corridor WBEC – West Borneo Economic Corridor SF – strategic framework WGE – Working Group on Environment

viii ABBREVIATIONS Executive summary

Introduction The strategies for each grouping will differ according to geography, economy, resources, institutions, and human egional Technical Assistance Project 7718 was capacities: there is no “one-size-fits-all” in the integration administered by the Asian Development Bank process. Despite these differences, however, advantages (ADB) with funding from the Government and opportunities are evident in linking programs and Rof Australia through the Australian Agency for projects for greater synergy toward a shared vision and International Development (AusAID). The project assessed goals, and developing mutually supportive and beneficial the links between the Association of Southeast Asian Nations relationships among them while remaining consistent with (ASEAN) and the Greater Mekong Subregion (GMS), the ASEAN goals and facilitating the achievement of the Brunei Darussalam−Indonesia−Malaysia–Philippines East AEC objectives. ASEAN Growth Area (BIMP-EAGA), and Indonesia− Malaysia−Thailand Growth Triangle (IMT-GT). It aimed This study is intended to serve as a resource for ASEAN, to promote links and improve coordination among GMS, BIMP-EAGA, and IMT-GT in discussions on them in the context of wide-ranging regional economic how to better improve linkages among themselves. The integration initiatives under the ASEAN Economic national and regional secretariats should take the lead Community (AEC). in initiating relevant actions, while other development partners, including ADB and AusAID, could use the The ASEAN Community, originally launched with a results of this study to identify follow-on studies and other target date of 2020, was envisaged to accelerate economic possible interventions in support of ongoing efforts at integration in response to dramatic changes in the region. accelerating economic integration in ASEAN. Several key The ASEAN Community has three pillars—the ASEAN concepts in strengthening strategic and institutional links Political-Security Community, AEC, and the ASEAN among ASEAN and the three subregional programs are Socio-Cultural Community—and its blueprints. The discussed below. centrality of the ASEAN Community has made it necessary to more carefully and systematically examine how the GMS, BIMP-EAGA, and IMT-GT are contributing toward Approach Adopted these aspirations of ASEAN. A closer assessment of the three subregional programs has become more urgent with the proximity of the AEC’s revised target date of 2015, and The study covered a strategy component and an institutional with many of these programs increasingly taking conscious component. The mapping of links at the strategic level efforts to link their activities with wider ASEAN initiatives. adopted a two-tiered review: program-wide and selected sector initiatives or programs (operational). The program- The imperative to assess their links and coordination wide review examined the contents of the strategic mechanisms is due to the fundamental differences in the frameworks of the subregional programs to assess references memberships, institutional structures, business processes, to ASEAN and its overarching frameworks, in particular, the and levels of government and ministerial involvement AEC Blueprint and Master Plan on ASEAN Connectivity. among ASEAN and the three subregional programs. The operational review focused on connectivity initiatives

EXECUTIVE SUMMARY ix in transport and energy, and in transport and trade The in-country mechanisms and arrangements for facilitation. The mapping of institutional links focused on coordinating the GMS, BIMP-EAGA, and IMT-GT the existing institutional mechanisms and arrangements for vary widely in their designated focal ministers and coordination in the subregional programs and ASEAN. agencies. Arrangements adopted by a member country are dependent upon its own specific situation: this implies that an organizational approach effective in one country may not necessarily be effective in another country. The national Key Findings secretariats and coordinators perform a range of functions; however, internal assessments have concluded that many of Strategy and program links. The importance of ASEAN the national offices lack the needed resources and capacity, is strongly recognized in the program-wide strategies of the and not all sector ministries concerned have designated GMS, BIMP-EAGA, and IMT-GT. Regional cooperation focal units or officials within their respective organizations. was a potent means toward collective action in overcoming This results in a lack of continuity and a low level of constraints unique to member countries. The proximity of participation in working group meetings and activities, and the AEC target in 2015, in particular, has spurred a greater an inadequate monitoring of subregional initiatives. sense of urgency to accelerate economic integration. BIMP- EAGA has manifested the strongest link with ASEAN, and Intra-program coordination among the concerned has been considered to be a subset of ASEAN. The BIMP- ministries and agencies varies by country, with more EAGA Roadmap to Development, 2006−2010 specified a formal arrangements in some countries than in others. role for the ASEAN Secretariat in refining the roadmap for In-country institutional arrangements for intra-program its implementation; however, the ASEAN Secretariat has coordination are generally well-defined, but this is not not yet fully performed this role. the case for in-country coordination among or across regional and subregional programs (inter-program). Links on cooperation in transport and energy, and The assessments of regional and subregional programs transport and trade facilitation, were sometimes purposive suggest that inter-program coordination is constrained or intended, other times random or unintended; some links by a lack of resources, limited technical capacities, were also manifested in physical connectivity expansion. historical antecedents and inertia from past practice, and In translating the ASEAN goal of physical connectivity, political factors and personalities. Member countries have the subregional corridors have provided a “land bridge” addressed inter-program coordination through informal, to connect ASEAN more intensively with other markets ad hoc approaches, and also through mechanisms in Asia. Further, ASEAN has played a more effective that are institutionalized on a government-wide basis. role in institutional connectivity involving region-wide On cross-cutting issues, inter-program coordination liberalization measures, standards and rules harmonization, between ASEAN and the GMS, BIMP-EAGA, and and policy coordination, among other areas. IMT-GT has been inadequate and has had limited results. For instance, the participation of the ASEAN Secretariat Institutional coordination and links. ASEAN, GMS, in the ministerial and senior officials meetings of BIMP- BIMP-EAGA, and IMT-GT have similar governance EAGA has not led to substantive results in the absence of a structures consisting of four levels—summit, ministerial, clear administrative mandate. senior officials, and sector working groups or bodies—in addition to their central secretariats. Certain changes in Concerns involving coordination mechanisms and the organizational structures and mandates of regional or arrangements that cut across regional and subregional subregional bodies have occurred recently, which include programs include (i) improving in-country coordination the adoption by BIMP-EAGA of a new organizational of various initiatives; (ii) addressing issues confronting structure effective 1 January 2013, and an ongoing the central secretariats; (iii) building capacity for project review of the ASEAN Secretariat. Meanwhile, all ASEAN identification, development, and implementation, Member States are members of at least one other regional particularly in BIMP-EAGA and IMT-GT; and or subregional program, creating interlocking memberships (iv) strengthening monitoring systems using a results-based that require close in-country coordination. Therefore, the framework. The potential benefits of addressing these issues first line of defense against a fragmented and uncoordinated are discussed below. approach to regional and subregional development is at the country level.

x EXECUTIVE SUMMARY Improved strategic, program, and institutional links especially for the CLMV countries—Cambodia, the between ASEAN and the three subregional programs Lao People’s Democratic Republic, Myanmar, and potentially offer the following individual and collective Viet Nam—and other lagging areas, such as those in benefits: BIMP-EAGA and IMT-GT.

(i) For ASEAN, the progress and achievements of the subregional programs related to the AEC targets could Strengthening Strategic and help improve its performance on the AEC scorecard. This approach is reasonable because ASEAN could Institutional Links (i) invoke the “minus X” principle for subregional projects, (ii) use the subregional programs as There are two critical factors for forging effective strategic implementing partners in operationalizing ASEAN- and institutional links: (i) well-functioning in-country wide agreements and initiatives, and (iii) pilot test new coordination is a necessary condition for promoting agreements and initiatives through the subregional effective links at the regional and subregional levels; and programs. ASEAN’s strength in rules and policy- (ii) national, regional, and subregional secretariats require based cooperation could also be complemented by sufficient competencies and mandates to perform their concrete, action-oriented projects and programs at the roles effectively in promoting links. subregional level. Pursuing opportunities for strengthening links. Based (ii) For GMS, BIMP-EAGA, and IMT-GT, stronger on this study’s operational review of selected connectivity ties with ASEAN could strengthen the support of areas, a number of broad measures could be taken to further central governments to their respective programs promote or expand links. For example, ASEAN might and projects. Regularizing their links with ASEAN, (i) take into account subregional corridor development plans operationally and technically, could also help increase in further prioritizing the ASEAN Highway Network routes their interaction with ASEAN development partners for upgrading and expansion, (ii) address gaps involving in the integration process and subregional activities. ferry links and cross-border highways links, (iii) strengthen For the three subregional programs, using policies coordination in the software elements of railway and and rules agreed to by ASEAN Member States would energy grid connectivity, or (iv) consider lead roles for provide a high degree of confidence about their BIMP-EAGA and IMT-GT in pursuing the ASEAN roll- reliability and sustainability. It would also save the on/roll-off (RoRo) network. For their part, the subregional subregional programs from “starting from scratch” programs might (i) promote and deepen their roles in pilot and avoid inconsistencies that may eventually testing transport and trade facilitation, (ii) expand railway need correction. They could also tap the technical connectivity beyond the Singapore−Kunming Rail Link, expertise and experience of the ASEAN sector bodies (iii) align the Cross-Border Transport Agreement under and network of learning institutions, and link up GMS to the new ASEAN Customs Transit System, or (iv) with ASEAN-wide private sector organizations in expand the BIMP-EAGA memorandum of understanding promoting investments. on non-conventional sized ships to IMT-GT.

(iii) For member countries, improvements in in-country Strengthening organizational structures and mechanisms and arrangements for coordination coordination mechanisms. Well-functioning in-country could ensure consistency and continuity in the coordination mechanisms can help avoid fragmentation, positions being taken by country delegations, avoid promote better resource allocation, and ensure alignment unnecessary overlaps and duplication of activities, of national priorities with regional and subregional strengthen alignment between national and regional commitments. Such mechanisms involve (i) an assessment or subregional strategies and priorities, and enhance of the adequacy of existing in-country arrangements and the impact of regional and subregional programs mechanisms within and among ministries for coordinating and projects. Improved inter-program coordination the initiatives of ASEAN and the three subregional could ultimately benefit member countries through programs, (ii) the identification of areas and actions for increased efficiency and a better division of labor in improvement, and (iii) the implementation of measures the deployment of human and financial resources; by to strengthen arrangements and mechanisms on a providing a clearer perspective of how the subregional sustained basis. frameworks fit into the larger ASEAN framework of cooperation; and by promoting more avenues Focal points for overall coordination are already well- for obtaining additional development assistance, established. Additional focal points—such as a ministry

EXECUTIVE SUMMARY xi or agency, department, or even specific official—for each Enhancing institutional capacities. This study also regional or subregional initiative by sector of cooperation, identified the importance of strengthening the capacity of where designations have not yet been made, could further the national and subregional secretariats for coordinating strengthen coordination. A periodic coordination meeting regional and subregional programs. Specifically, this including the secretariats of ASEAN, the GMS, BIMP- includes improving secretariats’ (i) conduct of analytical EAGA, and IMT-GT could serve as a forum to exchange work on common concerns and cross-cutting issues among information on recent developments, and identify areas the sectors of cooperation; (ii) preparation of technical or specific activities where links could be promoted. The reports, in coordination with concerned ministries to secretariats would then convey to the mandated bodies assist relevant bodies in making informed decisions; the relevant information discussed at the coordination (iii) provision of updated information on developments in meeting. Furthermore, establishing regular links between the region and on various regional cooperation programs; the ASEAN Secretariat and the subregional program (iv) appraisal of projects; and (v) monitoring of progress secretariats and/or their related sector groupings, and results. particularly for BIMP-EAGA and IMT-GT, would involve the institutionalization of certain roles, on the part of Mobilizing resources. The lack of resources for improving both the ASEAN Secretariat and the subregional program coordination within and across programs is a common secretariats, beyond conducting joint meetings. constraint faced by ASEAN and the subregional programs. If a consensus for improved coordination exists, then Mechanisms for sharing and discussing regional and a concerted effort would be necessary to help mobilize subregional master plans, roadmaps, and sector studies as resources for strengthening the capacity of national and planning and programming inputs could also be beneficial. central secretariats; improving mechanisms for inter- The mechanism could be a forum for discussing plans for program coordination at the overall, sector, and subsector specific sectors, issues, or themes, and may not necessarily levels; and expanding operational links between ASEAN be a formal structure or institutional link. A similar and the subregional programs. mechanism would be the regular conduct of workshops and seminars covering specific issues facing ASEAN, GMS, BIMP-EAGA, and IMT-GT to exchange experiences and lessons learned.

xii EXECUTIVE SUMMARY I. INTRODUCTION

his report presents an assessment of the links The study focused on the GMS, BIMP-EAGA, and among the Association of Southeast Asian Nations IMT-GT due to three main reasons. First, the roles of (ASEAN) and three subregional programs: (i) the the three subregional programs in ASEAN integration TGreater Mekong Subregion (GMS); (ii) the Brunei are explicitly cited in high-level ASEAN statements and Darussalam–Indonesia–Malaysia–Philippines East ASEAN declarations. Second, their major initiatives are included Growth Area (BIMP-EAGA); and (iii) the Indonesia– among the priority projects of the MPAC for achieving Malaysia–Thailand Growth Triangle (IMT-GT). The report physical connectivity. The MPAC also includes the setting is the result of a study completed under a regional technical up of a coordinating mechanism between the ASEAN assistance project (TA) executed by the Asian Development Secretariat and the respective secretariats of the three Bank (ADB) with funding from the Government of subregional programs as a key action under its strategy for Australia through the Australian Agency for International improving coordination of policies, programs, and projects Development (AusAID).1 The TA project aimed to identify among them. Third, the three subregional programs have means to promote links and improve coordination among been taking concerted efforts to link their activities to the these three subregional programs, and between them and broader ASEAN agenda. Meanwhile, covering only the ASEAN. The project was conceived in the context of wide- three subregional programs in the study, instead of six or ranging regional economic integration initiatives under the more programs that involve the participation of ASEAN ASEAN Economic Community (AEC)2 and heightened Member States,4 makes the assessment more manageable. connectivity agenda through the Master Plan on ASEAN Connectivity (MPAC).3 It is the first study undertaken The report is based on desk reviews of official documents, to explicitly map and analyze the strategic programs such as strategic frameworks, blueprints, roadmaps, and institutional links among the GMS, BIMP-EAGA, connectivity-related sector strategies, and institutional IMT-GT, and ASEAN. reviews of the three subregional programs and ASEAN. The reviews were also supplemented by consultations with government officials5 and private stakeholders6 in ASEAN Member States and with the secretariats of the three

1 ADB. 2010. Promoting Links and Improving Coordination among the Greater Mekong 4 The other subregional programs involving the ASEAN Member States include Subregion (GMS), the Brunei Darussalam–Indonesia–Malaysia–Philippines East the (i) ASEAN−Mekong Basin Development Cooperation, (ii) Ayeyawady−Chao ASEAN Growth Area (BIMP-EAGA), the Indonesia–Malaysia–Thailand Growth Phraya−Mekong Economic Cooperation Strategy, (iii) Cambodia−the Lao People’s Triangle (IMT-GT), and the Association of Southeast Asian Nations (ASEAN). Manila Democratic Republic−Viet Nam Development Triangle, (iv) Brunei Darussalam− (TA 7718-REG, $400,000, approved on 15 December, financed by the Government Indonesia−Malaysia Heart of Borneo program, (v) Mekong−Ganga Cooperation, of Australia and administered by ADB). and (vi) Mekong River Commission. 2 The AEC Blueprint was adopted at the 13th ASEAN Summit on 20 November 5 Agencies consulted include the subregional cooperation offices (senior officials, 2007 in Singapore to serve as a coherent master plan guiding the establishment national coordinators, and national secretariats); the Ministry of Foreign Affairs of the AEC. The AEC Blueprint is one of the three pillars of the Roadmap for an (ASEAN Department); and the ministries of trade; industry and commerce; ASEAN Community (2009–2015)—signed on 1 March 2009 in Cha-am, Thailand transport; energy; and planning. by ASEAN leaders—in addition to political-security and socio-cultural community. 6 Representatives from the private sector arms of the regional and subregional 3 The MPAC was endorsed during the 17th ASEAN Summit in October 2010, groupings comprised the ASEAN Business Advisory Council, BIMP-EAGA in Jakarta. Business Council, GMS Business Forum, and IMT-GT Joint Business Council.

introduction 1 subregional programs and ASEAN; studies commissioned by ADB and other international organizations; and independent assessments by academics, practitioners, and research institutions. A regional workshop was convened to obtain feedback on the report’s findings and recommended approaches.

As envisaged in the TA project, the focus of the study has two major components: strategic links and institutional links. The report focused principally on the links between the three subregional programs and ASEAN, rather than among the three subregional programs. This is due to the fundamental differences in the geographical coverage, rationale, and operational modalities among the GMS, BIMP-EAGA, and IMT-GT.7

7 This point was emphasized during consultations with officials from the Member States, secretariats of the subregional programs, and ASEAN.

2 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt II. Rationale for promoting links and improving coordination

ASEAN, GMS, BIMP-EAGA, GMS and IMT-GT The Greater Mekong Subregion (GMS) Economic Cooperation Program was established in 1992 among ASEAN six countries that share the Mekong River—Cambodia, the People’s Republic of China (PRC),8 the Lao PDR, he Association of Southeast Asian Nations Myanmar, Thailand, and Viet Nam. Since its inception, the (ASEAN) was established in 1967 with the signing GMS Program has focused on promoting connectivity as a of the ASEAN Declaration (Bangkok Declaration) means of accelerating trade and investment, consequently Tby Indonesia, Malaysia, the Philippines, Singapore, stimulating economic growth, and ultimately helping and Thailand. Brunei Darussalam joined in 1984, Viet Nam to reduce poverty. At the onset, GMS cooperation took in 1995, the Lao People’s Democratic Republic (Lao PDR) a pragmatic approach, recognizing the need to generate and Myanmar in 1997, and Cambodia in 1999, making concrete results in order to build mutual trust and up what are today the 10 Member States of ASEAN. The confidence eroded by decades of conflict. It was agreed ASEAN Declaration set out the aims and purposes of that physical connectivity was a major development ASEAN to promote economic growth, social progress, constraint to be overcome and, together with other cultural development, regional peace, and collaboration nonphysical impediments, should be progressively and partnership with the international community. These addressed. In addition to focusing on physical connectivity, aims and purposes evolved through the years as ASEAN cooperation also extended to other areas where regional responded to new challenges that emerged in the regional cooperation was perceived to contribute to addressing and global landscape. In 2003, on the occasion of its 30th common concerns and harnessing the subregion’s collective anniversary, ASEAN leaders announced their vision of potential. The GMS presently covers nine areas of establishing an ASEAN Community by 2020. This signified cooperation: (i) agriculture, (ii) energy, (iii) environment, commitment at the highest political level to accelerate (iv) human resource development, (v) investment, the economic integration process in response to dramatic (vi) telecommunications, (vii) tourism, (viii) trade, and changes in the patterns of industrial production and trade (ix) transport. in the region. The ASEAN Community comprises three pillars and a blueprint for its realization: ASEAN Political- Security Community, ASEAN Economic Community BIMP-EAGA (AEC), and ASEAN Socio-Cultural Community. In 2007, ASEAN leaders decided to advance the realization of the The Brunei Darussalam−Indonesia−Malaysia−Philippines ASEAN Community by 2015. The ASEAN Charter was East ASEAN Growth Area (BIMP-EAGA) was established signed the following year, in 2008, which provided the in 1994 to accelerate the socioeconomic development of less- legal and institutional foundation for achieving the ASEAN Community. 8 The GMS originally covered only Yunnan Province of the PRC. In December 2004, Guangxi Zhuang Autonomous Region in the PRC was formally added as part of the GMS.

rationale for promoting links and improving coordination 3 developed, marginalized, and geographically remote areas Promoting Links and Improving in these four countries as part of a broader goal to narrow Coordination the development gaps, not only among ASEAN Member States, but also within them. The objective of BIMP-EAGA is reflected in its geographic focus on provinces and states The centrality of the ASEAN Community with its three that are relatively underdeveloped, instead of entire national pillars—economic, socio-cultural, and political-security— territories. With the exception of the entire sultanate of has made it necessary to more carefully and systematically Brunei Darussalam, the participating entities in the program examine how subregional programs are contributing include nine provinces in Kalimantan, Sulawesi, the island toward each pillar. In particular, the AEC has important chain of Maluku, and Papua (Indonesia); the federal states ramifications for the medium- to long-term strategic of Sabah and Sarawak, and the federal territory of Labuan goals of the three subregional programs. Furthermore, the (Malaysia); and Mindanao (26 provinces) and the province subregional programs can play an important role by testing of Palawan (the Philippines). The BIMP-EAGA program new ideas and approaches to support ASEAN’s efforts to of cooperation presently covers (i) cross-border trade and realize the AEC. This need has become more urgent with investment; (ii) customs, immigration, quarantine, and the proximity of the AEC’s target date of 2015, and with security; (iii) infrastructure development, which includes many of the subregional programs increasingly taking transport, energy, and information and communication conscious efforts to link their activities with wider ASEAN technology; (iv) natural resources development, which initiatives. This TA project was thus conceived to provide the consists of agriculture, fisheries, and environment; means for assessing the actual and potential links between (v) small and medium-sized enterprises development; and the GMS, BIMP-EAGA, and IMT-GT subregional (vi) tourism. programs with ASEAN, considering their overlapping country memberships (with the exception of the PRC in the GMS). Identifying the points of convergence and IMT-GT complementarities is important for developing a mutually supportive and beneficial relationship among these regional The Indonesia−Malaysia−Thailand Growth Triangle and subregional programs. (IMT-GT) was established in 1993 with the objective of accelerating the economic transformation of the member Overlapping membership has the advantage of being states and provinces in the three member countries, able to link programs and projects for greater synergy by exploiting their underlying complementarities and toward a shared vision and common goals. Unity in comparative advantages. The three countries, which are direction, however, does not imply uniformity in pace among the rapidly growing middle-income members and approach. Regional cooperation and integration of ASEAN, were motivated to embark on area-based (RCI) is likely to follow a multitrack and multispeed cooperation in an effort to accelerate the growth of their process. Different regions, subregions, and countries lagging localities, especially in Sumatra and southern will embrace RCI at different speeds; hence, the pace Thailand, at a sufficiently rapid pace. The goal is to allow of progress for different aspects of RCI will vary.9 For them to catch up with the leading states and provinces, and instance, the GMS has been involved in project and sector thus benefit more evenly from economic integration. Since strategy development since its inception, while project 1993, IMT-GT has expanded to its present geographic momentum only recently began in BIMP-EAGA and scope of 32 provinces and states—14 provinces in southern IMT-GT in late 2009. It is likely that within ASEAN and Thailand, 8 states in Peninsular Malaysia, and 10 provinces its subregions, countries will engage with their immediate on the island of Sumatra in Indonesia. The IMT-GT neighbors as an initial step toward integration, gradually program of cooperation presently covers (i) agriculture, enlarging their engagement to the rest of the region and (ii) halal products and services, (iii) human resource eventually outside the region. The strategies for each development, (iv) tourism, (v) trade and investment, and grouping will differ according to geography, economy, (vi) transport and infrastructure. resources, institutions, and human capacities: there is no “one-size-fits-all” in the integration process. Mapping the links between ASEAN and its subregions can help situate overall progress in the integration process.

9 ADB. 2006. Regional Cooperation and Integration Strategy. Manila.

4 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Apart from strategic considerations, institutional and IMT-GT have area-based memberships and initiatives dimensions also weigh heavily on the need for better that need support from central governments. There is a coordination among the regional and subregional programs. common need to address the national−local divide issues in There are differences in the institutional structures, business implementing initiatives. processes, and levels of government and ministerial involvement in ASEAN and the three subregional programs. On one hand, differences among the subregional programs ASEAN involves entire countries and spans not only can limit the benefits of developing closer links. On the other economic but also social, political, and security concerns. hand, these can help promote specific geographic and sector ASEAN has acquired a legal status with the promulgation of foci, while remaining consistent with ASEAN goals. The its Charter in 2008. The GMS covers five ASEAN Member adoption of coordination mechanisms that strengthen links States, while BIMP-EAGA (except the entirety of Brunei and harness the best institutional features of ASEAN and Darussalam) and IMT-GT involve only some provinces the three subregional programs can facilitate achievement and states in their participating countries. The GMS is of AEC objectives. ASEAN’s top-down and policy-driven national in scope, but it also has initiatives covering specific approach could be complemented by the bottom-up and areas that require local government support. BIMP-EAGA project-driven approach of the subregional programs.

rationale for promoting links and improving coordination 5 III. Strategy and program links

Approach to Strategy Mapping focus, however, was given to the vertical links on account of the centrality of ASEAN. On the other hand, horizontal links were rather tenuous in view of the fundamental he mapping of links at the strategy level consisted of differences among the three subregional programs in their a two-tiered review: (i) program-wide review; and rationale, principles, and operational modalities. (ii) selected sector, initiative, or program review, T which is also referred to as an operational review. The TA did not intend to conduct a sector analysis, but a review at the operational level mainly served to illustrate The review at the program-wide strategy level examined the how links develop, are manifested, or can be further contents of the frameworks of the subregional programs to expanded. The review adopted existing strategies as given, assess the references made to the Association of Southeast used assessments drawn from commissioned studies and Asian Nations (ASEAN) and its overarching frameworks, reports, and relied on official sources. in particular, the Association of Southeast Asian Nations (ASEAN) Economic Community (AEC) Blueprint (footnote 2) and Master Plan on ASEAN Connectivity Review of Program-Wide Strategies (MPAC) (footnote 3). Explicit references to ASEAN in the strategy frameworks of the subregional programs would be an indication of the intent to operationalize links with ASEAN Economic Community ASEAN. Moreover, an endorsement at the strategy level is an enabler for action at the operational level; it could shape The AEC is the end goal of Vision 2020 declared at the plans of actions and implementation modalities for certain Bali Summit in October 2003. It embodies the desire initiatives. It is expected that where there is evidence of a of the ASEAN Member States to deepen and broaden strong link at the strategy level, a strong link would also be economic integration by 2020. In 2007, the ASEAN found at the operational level (Figure 1). Member States agreed to a single and coherent blueprint (the AEC Blueprint) for advancing the realization of the The review of strategies at the operational level focused on the AEC by 2015, by identifying its characteristics, elements, links in physical and institutional connectivity as envisaged time-bound targets, and measures for implementation. in the technical assistance (TA) project (footnote 1). In Flexibilities were agreed upon to accommodate the interests physical connectivity, the areas selected are transport and of all of the ASEAN Member States. energy; in institutional connectivity, they are transport and trade facilitation. Both vertical and horizontal links The AEC aims to establish ASEAN as a single market were reviewed: vertical links between the three subregional and production base to make ASEAN more dynamic programs and ASEAN, and horizontal links between the and competitive. This will be achieved by (i) accelerating Greater Mekong Subregion (GMS), Brunei Darussalam− regional integration in priority sectors; (ii) facilitating the Indonesia−Malaysia−Philippines East ASEAN Growth movement of business persons, skilled labor, and talents; Area (BIMP-EAGA), and Indonesia−Malaysia−Thailand and (iii) strengthening the institutional mechanisms of Growth Triangle (IMT-GT) subregional programs. Greater ASEAN. At the same time, the AEC will seek to narrow the

6 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Figure 1: Two-Tiered Approach to Strategy Mapping

ASEAN (AEC, MPAC)

Strategy Frameworks GMS Strategic Framework Convergence BIMP-EAGA Roadmap and Blueprint IMT-GT- Roadmap and Blueprint

Operational Frameworks

Coherence Transport (land, sea, air) Transport and Trade Facilitation Energy

AEC = ASEAN Economic Community, ASEAN = Association of Southeast Asian Nations, BIMP-EAGA = Brunei Darussalam−Indonesia− Malaysia−Philippines East ASEAN Growth Area, GMS = Greater Mekong Subregion, IMT-GT = Indonesia−Malaysia−Thailand Growth Triangle, MPAC = Master Plan on ASEAN Connectivity, REG = regional, TA = technical assistance. Source: ADB TA 7718-REG Study Team.

development divide by helping to accelerate the integration Master Plan on ASEAN Connectivity of Cambodia, the Lao People’s Democratic Republic (Lao PDR), Myanmar, and Viet Nam—collectively known as To give further impetus to ASEAN integration, the MPAC CLMV—through the Initiative for ASEAN Integration. was launched at the 17th ASEAN Summit in October 2010. The MPAC was formulated both as a strategic document The AEC has four interrelated and mutually reinforcing for achieving overall ASEAN connectivity, and a plan of components: action for immediate implementation in 2011–2015. Its three pillars connect ASEAN through (i) enhanced (i) a single market and production base, physical infrastructure (physical connectivity); (ii) effective (ii) a highly competitive economic region, institutions, mechanisms, and processes (institutional (iii) a region of equitable economic development, and connectivity); and (iii) empowered peoples (people-to- (iv) a region fully integrated into the global economy. people connectivity).

The AEC Blueprint ensures consistency and coherence Significantly, the MPAC indicated that it will ensure the among these elements, as well as proper coordination in synchronization of ongoing sector strategies and plans with their implementation. Across the four AEC components the framework of ASEAN and its subregional programs, are 176 measures with corresponding sets of actions. For including the GMS, BIMP-EAGA, and IMT-GT. The each action, individual ASEAN Member States commit to three pillars and respective components of the MPAC are a specific timeframe for implementation—converging in summarized in Table 1. 2015—taking into account its unique legal and regulatory frameworks, and institutional capacities. A scorecard tracks progress toward AEC 2015, with targets consisting primarily of policy, legislative, and regulatory measures; and other process-oriented activities.

strategy and program links 7 Table 1: Master Plan on ASEAN Connectivity Pillars and Component Strategies Pillars and Objectives Component Strategies Physical Connectivity ■ Establish regional connectivity through multimodal Strategy 1 Complete the ASEAN Highway Network transport system, information and communication Strategy 2 Complete the implementation of the Singapore–Kunming Rail Link technology (ICT) infrastructure, and regional energy Strategy 3 Establish an efficient and integrated inland waterway system security framework Strategy 4 Accomplish an integrated and competitive maritime transport Strategy 5 Establish an integrated and seamless multimodal transport Strategy 6 Accelerate the development of ICT infrastructure Strategy 7 Resolve institutional issues in ASEAN energy infrastructure Institutional Connectivity ■ Eliminate impediments to movements of vehicles, Strategy 1 Operationalize the three framework agreements on transport goods, services, and skilled labor across borders facilitation ■ Open ASEAN progressively to investments from Strategy 2 Facilitate interstate passenger land transportation within and beyond the region Strategy 3 Develop an ASEAN Single Aviation Market Strategy 4 Develop an ASEAN Single Shipping Market Strategy 5 Eliminate barriers to merchandise trade in the ASEAN region Strategy 6 Develop an efficient and competitive logistics sector Strategy 7 Substantially improve trade facilitation in the ASEAN region Strategy 8 Enhance border management capabilities Strategy 9 Open ASEAN to investments within and outside the ASEAN region Strategy 10 Strengthen institutional capacity for policy and program coordination People-to-People Connectivity ■ Increase greater people interaction in ASEAN Strategy 1 Promote deeper intra-ASEAN social and cultural understanding Strategy 2 Encourage greater intra-ASEAN people connectivity ASEAN = Association of Southeast Asian Nations. Source: Compiled from the ASEAN Secretariat. 2010. Master Plan on ASEAN Connectivity. Jakarta.

Among the several actions listed under each pillar, the GMS MPAC identified 15 priority projects (Box 1) with potentially high and immediate impacts on ASEAN GMS Strategic Frameworks, 2002–2012 and 2012– connectivity. The priority projects involving key initiatives 2022. It was not until 2002—or 10 years after the GMS in the subregional programs are the following: Program was established—that the first 10-year GMS Strategic Framework, 2002–2012, or SF-I, was formulated. (i) implementation of two power projects under the SF-I rationalized and unified the program-, project-, and BIMP-EAGA and IMT-GT priorities, which are activity-based approaches of prior years into five broadly Melaka–Pekan Baru Power Interconnection (IMT- defined strategic thrusts, with 11 flagship programs GT: Malaysia and Indonesia), and West Kalimantan– supporting the shared vision of a more integrated, Sarawak Power Interconnection (BIMP-EAGA: prosperous, and harmonious subregion. SF-I gave the Indonesia and Malaysia); GMS Program greater focus, generated the need for both (ii) conduct of study on the RoRo network and short-sea in-depth and comprehensive sector analysis as a basis for shipping that relate to similar initiatives in the BIMP- project formulation and programming, and indicated EAGA and IMT-GT; the need for a greater balance between the hardware and (iii) completion of the Singapore–Kunming Railway Link, software aspects of connectivity. The spatial focus of the which involves a segment being implemented under GMS Program became more pronounced with high the GMS Program; and priority given to three economic corridors: the East−West (iv) operationalization of ASEAN agreements on transport Economic Corridor, North−South Economic Corridor, facilitation, which will impact transport agreements and Southern Economic Corridor. under the subregional programs. In the course of SF-I implementation, the GMS Program The specifics of these projects are discussed in the relevant evolved into a more complex cooperation arrangement. sections under the operational review. While retaining essentially its pragmatic and results- oriented modality, the GMS Program began to undertake

8 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Box 1: Priority Projects in the Master Plan on ASEAN Connectivity

(i) Completion of the ASEAN Highway Network missing links and upgrade of Transit Transport Routes, (ii) Completion of the Singapore–Kunming Rail Link missing links, (iii) Establishment of an ASEAN Broadband Corridor, (iv) Melaka–Pekan Baru Interconnection (IMT-GT: Malaysia and Indonesia), (v) West Kalimantan–Sarawak Interconnection (BIMP-EAGA: Indonesia and Malaysia), (vi) Conduct of study on the Roll-on/Roll-off network and short-sea shipping, (vii) development and operationalization of mutual recognition arrangements for prioritized and selected industries, (viii) Establishment of common rules for standards and conformity assessment procedures, (ix) Operationalization of all national single windows by 2012, (x) Options for a framework or modality toward the phased reduction and elimination of scheduled investment restrictions and impediments, (xi) operationalization of ASEAN agreements on transport facilitation, (xii) easing of visa requirements for ASEAN nationals, (xiii) Development of ASEAN virtual learning resources centers, (xiv) Development of information and communication technology skills standards, and (xv) ASEAN community building programme.

ASEAN = Association of Southeast Asian Nations, BIMP-EAGA = Brunei Darussalam−Indonesia−Malaysia−Philippines East ASEAN Growth Area, IMT-GT = Indonesia−Malaysia−Thailand Growth Triangle. Sources: ASEAN Secretariat. 2010. Master Plan on ASEAN Connectivity. Jakarta.; BIMP-EAGA Facilitation Centre. 2012. BIMP-EAGA Implementation Blueprint 2012–2016. Kota Kinabalu; IMT-GT Subregional Cooperation. 2012, IMT-GT Implementation Blueprint: 2012–2016. Putrajaya.

more difficult policy-oriented initiatives that involved on the policy dimensions of infrastructure development, adjustments in national legislative and regulatory in particular, for transport and trade facilitation. It also frameworks. However, GMS success in the software area recognized the need to link more closely with the broader has been limited. For one, the Cross-Border Transport regional integration agenda. At the same time, SF-II sought Agreement, which provides a comprehensive framework clarity on the kind of regional issues that should really be for transport and trade facilitation, has met with several covered by the GMS Program, as distinguished from those implementation bottlenecks. The Intergovernmental that should be addressed by other subregional cooperation Agreement on Power Interconnection and Trade, which seeks programs. To bring about greater synergy and linkages to establish the policy and regulatory framework for GMS across sectors (e.g., between energy and food security), power trade, has made slow progress. The transformation climate change was included as a cross-cutting issue. The of transport corridors into full-fledged economic corridors regional investment programming framework to support has been set back by the absence of a comprehensive and SF-II is currently being developed. Box 2 highlights the coherent spatial strategy and master plan, as well as a more features of SF-I and SF-II. inclusive and broad-based institutional arrangement. It was not until 2008 that specific strategies and action plans were Links with ASEAN. SF-I considered ASEAN basically as formulated for the three economic corridors, which now the regional context of the GMS Program. Formulated a serve as the blueprint that guides cooperation in this area. few years after CLMV became members of ASEAN in the late 1990s, SF-I saw ASEAN’s expanded membership both Recognizing the many challenges that continue to confront as an opportunity and a challenge for the GMS Program. the GMS, the successor Greater Mekong Subregion Economic As members of ASEAN, CLMV could realize economies Cooperation Program Strategic Framework, 2012–2022, or of scale from a larger market, possibilities for resource SF-II, was endorsed at the 17th Ministerial Meeting in sharing, and other initiatives to strengthen productivity August 2011 and adopted during the 4th GMS Summit in and product quality. The GMS Program recognized that December 2011. It called for fine-tuning the GMS Program to take advantage of the benefits of ASEAN free trade while retaining the same vision, goals, and principles in SF- arrangements, cross-border impediments in the GMS I, which continued to be relevant. SF-II, the second 10-year would have to be reduced or eliminated. Goods and people strategic framework, also called for a more effective focus could then flow freely across the subregion, leading to on the software aspects to complement the continued focus increased trade and investments. Ultimately, the goal is for on hardware; this would entail achieving greater progress CLMV to catch up with the “older” members of ASEAN

strategy and program links 9 Box 2: Greater Mekong Subregion Strategic Framework I and II Vision, Goals, and Strategic Thrusts

Vision A more integrated, prosperous, and harmonious subregion Strategic Framework I (2002–2012) Strategic Framework II (2012–2022) Goals • Accelerated and sustained economic growth • Enabling policy environment • Reduced poverty and income disparities • Effective infrastructure to facilitate cross-border trade, • Improved quality of life investment, tourism, and other forms of economic • Sustainable management of environment and natural cooperation resources • Equitable and sustainable environment and social interests • Development of human resources and skills competencies

Strategic Thrusts Refinements in Approach

• Strengthen infrastructure linkages • More effective focus on the software aspects to • Facilitate cross-border trade, investment, and tourism complement the continued focus on hardware • Enhance private sector participation and competitiveness • Greater selectivity and focus on areas within sectors that • Develop human resources and skills competencies are clearly regional in nature • Protect the environment and promote sustainable use of • Closer link to the broader regional integration agenda shared natural resources • Greater linkages across sectors (e.g., between energy and food security), including climate change as a key development and cross-cutting issue • Rebalancing, without changing the broad sector focus of the Greater Mekong Subregion Program, bearing in mind organizational capacities and resources • Focus on monitoring results

Sources: ADB. 2002. The Greater Mekong Subregion Economic Cooperation Program Strategic Framework, 2002–2012. Manila; ADB. 2012. The Greater Mekong Subregion Economic Cooperation Program Strategic Framework 2012–2022. Manila.

(also referred to as ASEAN-6) to enable them to realize the links between the CLMV and Thailand and other countries full benefits of regional integration. The GMS Program and subregions, in particular, the PRC and South Asia. recognized that it was necessary to narrow the development divide between CLMV and ASEAN-6 to eliminate a two- tiered ASEAN that would be detrimental to integration. BIMP-EAGA

In comparison, SF-II explicitly recognized the need to link The areas covered by BIMP-EAGA are among the poorest with ASEAN’s regional integration agenda, and to seek a in their respective countries, but they are linked by a unique role for the GMS Program in contributing to this long history of trade and economic relations dating back goal. While SF-I saw the GMS Program as a means to narrow centuries, with barter as a major form of trade until just the development divide between CLMV and ASEAN-6, a few decades ago. Between 1994 and 1997, cooperative SF-II viewed CLMV, Thailand, and the People’s Republic agreements were forged to facilitate transport and upgrade of China (PRC) as being actively engaged in regional infrastructure facilities at designated points as a means to supply chains. This was brought about by the realization of promote cross-border trade, tourism, and investments. the ASEAN Free Trade Area and its expansion to include The long-term goal is to change the economy of BIMP- the PRC and other countries and regions. Thus, in SF-II, EAGA from one based on resource extraction to one the trajectory of physical connectivity is no longer limited based on value-added processing and non-resource-based to promoting links within GMS but also to providing vital activities. The underlying strategy is to mobilize private

10 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt sector investments in the subregion, with the governments and Greater Sulu Sulawesi Corridor (GSSC). Learning providing the facilitative environment and support. In from the experience of the roadmap, the implementation the aftermath of the Asian financial crisis in 1998, BIMP- blueprint followed a more disciplined process of project EAGA went into a brief hiatus, but started a revival in 2001. preparation and programming to ensure that projects were Shortly thereafter, in 2004, the subprogram formulated well-prepared and had a good chance of being completed a roadmap, as directed by the 9th Ministerial Meeting in successfully. Box 3 highlights the goals and strategic Balikpapan. thrusts of the BIMP-EAGA roadmap and implementation blueprint. BIMP-EAGA Roadmap to Development, 2006– 2010. The roadmap spanned wider horizons relative to Links with ASEAN. The articulation of the links in the the program’s earlier beginnings. The roadmap’s goal went BIMP-EAGA Roadmap to Development, 2006–2010 with beyond promoting intra-EAGA trade to developing the ASEAN, as a framework and an institution, was explicit. subregion’s competitive advantage in regional and global The roadmap articulated the desire of the member countries markets by promoting cross-border complementation, to integrate their economies into the AEC. It further industry clustering, and value chain activities. Within elaborated on the need to narrow the development gap, not this broader strategy, the roadmap indicated four specific only among the ASEAN Member States, but also within objectives: (i) promotion of intra- and extra-industry countries such as Indonesia; the Philippines; and, to a lesser trade in selected priority sectors, (ii) coordinated extent, Malaysia, where pockets of underdevelopment management of natural resources, (iii) coordinated still exist. The development of these areas needs to be planning and implementation of infrastructure support, accelerated if the full benefits of integration are to be and (iv) strengthening of BIMP-EAGA structures and equitably distributed. The roadmap viewed BIMP- mechanisms for effective roadmap implementation. It set EAGA as a subset of ASEAN and, consistent with that targets to increase intra-EAGA trade by 10%, investments view, indicated that BIMP-EAGA initiatives to deepen by 10%, and tourism by 20%. subregional economic integration would be pursued within the broader ASEAN integration effort. The roadmap called The midterm assessment of the roadmap conducted in for closer cooperation between BIMP-EAGA and ASEAN, 2008 and the final assessment in 2010 concluded that and the active involvement of the ASEAN Secretariat in (i) implementation of the roadmap was slow and uneven; (ii) refining the roadmap in the course of its implementation. many of the projects were either still in the conceptual stage The ASEAN Secretariat will provide inputs to contextualize or were just beginning to be implemented; and (iii) project and guide the various EAGA initiatives, and link them with profiles were inadequate; as a consequence, it was difficult the activities of the appropriate ASEAN bodies. As the to monitor outcomes and impact. It was recognized that subregional cooperation measures becomes more defined, many of the roadmap projects would take beyond 2010 the ASEAN Secretariat will also be expected to help source to complete. The BIMP-EAGA countries concluded that and mobilize resources for the implementation of EAGA’s the strategies in the roadmap remain valid; hence, they projects and initiatives. decided that an implementation blueprint, rather than a successor roadmap, would be more appropriate as a guiding Notwithstanding these intentions, the involvement of the document for focusing efforts on delivering results. ASEAN Secretariat in the implementation of the BIMP- EAGA Roadmap to Development, 2006–2010 has been BIMP-EAGA Implementation Blueprint, 2012– generally passive and basically confined to attendance in 2016. The implementation blueprint was approved by BIMP-EAGA meetings. Except for broad statements on the 8th BIMP-EAGA Summit in April 2012. Although its ASEAN developments, the ASEAN Secretariat has not strategic thrusts were to be carried over from the roadmap, been proactively engaged in providing inputs to EAGA’s some refinements and new elements were introduced. action plans, programs, and projects that could potentially The strategic focus of the implementation blueprint was forge links with ASEAN initiatives. grouped into four pillars: (i) enhancing connectivity within and outside BIMP-EAGA, (ii) establishing BIMP- Under the BIMP-EAGA Implementation Blueprint 2012– EAGA as a food basket for ASEAN and the rest of Asia, 2016, the link to ASEAN at the strategy level was also (iii) promoting BIMP-EAGA as the premier regional evident. The implementation blueprint recognized that tourism destination, and (iv) ensuring the sustainable the wide-ranging regional economic integration initiatives management of the environment. The connectivity pillar, of ASEAN would have important ramifications on the in particular, was strengthened by focusing on critical medium- to long-term strategic goals of BIMP-EAGA. infrastructure to complete missing links in two priority In addition, the implementation blueprint indicated that corridors—the West Borneo Economic Corridor (WBEC) BIMP-EAGA, as a subset of ASEAN, could contribute more

strategy and program links 11 Box 3: BIMP-EAGA Roadmap to Development and Implementation Blueprint: Goals, Pillars, and Strategic Thrusts

Roadmap 2006–2010 Blueprint 2012–2016

Goals Pillars • Narrow the development gap across and within the EAGA • Enhance connectivity within and outside BIMP-EAGA member countries, as well as across ASEAN-6 countries • Establish BIMP-EAGA as a food basket for ASEAN, and the (long term) rest of Asia regional tourism destination • Increase trade, investments, and tourism within EAGA • Ensure the sustainable management of the environment (short term)

Strategic Thrusts Refinements and New Elements

• Promotion of intra- and extra- industry trade in selected • Connectivity pillar focused on critical infrastructure to priority sectors complete missing links in two priority corridors—the West • Coordinated management of natural resources Borneo Economic Corridor and Greater Sulu Sulawesi • Coordinated planning and implementation of infrastructure Corridor support • Community-based ecotourism identified as a flagship • Strengthening of BIMP-EAGA structures and mechanisms program within the tourism sector for effective implementation of the roadmap • Cooperation in the environment to build on ongoing initiatives where BIMP-EAGA countries are participating (i.e., the Heart of Borneo and Coral Triangle initiatives) • Food basket strategy as a new element and considering relevant ASEAN frameworks on food security

ASEAN = Association of Southeast Asian Nations; ASEAN-6 = Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore, and Viet Nam; BIMP-EAGA = Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area. Sources: Compiled from ADB. 2006. BIMP-EAGA Roadmap to Development 2006–2010. Manila and BIMP-EAGA Facilitation Centre. 2012. BIMP-EAGA Implementation Blueprint 2012–2016. Kota Kinabalu.

directly toward AEC goals by establishing closer linkages growth magnet and substantially improve the quality of life of between their initiatives. Examples of this are BIMP- its residents. The 1997/98 Asian financial crisis interrupted EAGA’s connectivity projects that are already reflected in IMT-GT’s initial efforts at cooperation as the countries the Master Plan on ASEAN Connectivity (MPAC). The attended to more pressing domestic concerns. A revival underpinning principle of the implementation blueprint’s began in 2005 when the first IMT-GT Summit requested focus on accelerated project implementation was deemed the Asian Development Bank (ADB) to prepare the first important in realizing the benefits of the AEC. Unlike in IMT-GT roadmap, which was subsequently endorsed by the the roadmap, there was no specific reference made to the 2nd IMT-GT Summit in 2007. institutional involvement of the ASEAN Secretariat in the implementation blueprint processes. IMT-GT Roadmap for Development, 2007–2011. The roadmap, entitled Building a Dynamic Future: A Roadmap for Development, 2007–2011, articulated the Indonesia−Malaysia−Thailand vision of a seamless progressive, prosperous, and peaceful Growth Triangle subregion with improved quality of life. The roadmap specified two anchors where projects and activities would The IMT-GT subregion is abundant with agricultural lands be clustered: (i) a policy and regulatory anchor, and (ii) and rich natural resources, which are potential sources of an anchor built around major IMT-GT connectivity rapid economic growth that could help reduce poverty. corridors. The first anchor is aimed at providing an Combined with a dynamic private sector, these endowments enabling policy and regulatory environment conducive have the potential to transform the subregion into a powerful to private sector activities in the IMT-GT subregion. The

12 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt second anchor would serve as the “trunk lines” from which to ensure that only those projects with well-defined development radiates to neighboring areas. The roadmap concepts, clear project accountability, and identified identified five strategic objectives to (i) facilitate and sources of financing were included in the implementation promote intra- and inter-IMT-GT trade and investment; blueprint. In addition, only those projects with secured (ii) promote the growth of agriculture, agro-industry, financing were included in the rolling pipelines. The sector and tourism; (iii) strengthen infrastructure linkages and strategies formulated and adopted as part of the mid-term support to the integration of the IMT-GT subregion; (iv) review of the IMT-GT roadmap provided sharper focus develop human resources and skills competencies, enhance and anchor for project development. The implementation mobility of labor, and strengthen environment and natural blueprint was approved by the 6th IMT-GT Summit in resource management; and (v) strengthen institutional April 2012. Box 4 summarizes the goals and strategies of arrangements and mechanisms for cooperation, including the IMT-GT roadmap and implementation blueprint. public–private sector collaboration, participation of stakeholders at the local level, and mobilization of support Links with ASEAN. In both the IMT-GT roadmap and from development partners. implementation blueprint, references made to ASEAN pertained to shared aspirations, as well as the need for IMT- The IMT-GT roadmap reflected measures that were GT to reinforce ASEAN goals and take advantage of the directly supportive of ASEAN initiatives: (i) simplification; opportunities from integration. The roadmap indicated that standardization; and harmonization of customs, IMT-GT’s vision of “a seamless, progressive, prosperous, immigration, quarantine, and security; (ii) improvement and peaceful subregion with improved quality of life” is not of cross-border infrastructure and transport service only consistent with, but is also intended to contribute to, connections; (iii) facilitation of road transport; the realization of the AEC. One of the roadmap’s guiding (iv) adoption of mutual recognition arrangement and principles is for activities to complement and reinforce accreditation programs; (v) cooperation in environment related activities in ASEAN. The IMT-GT roadmap and and natural resource management; (vi) cooperation in the implementation blueprint cited the need for the subregion control and improvement of surveillance, public awareness, to take advantage of the benefits of globalization and and response to pandemics due to transboundary animal ASEAN economic integration. diseases and natural disasters; and (vii) strengthening of mechanisms to improve IMT-GT’s linkages with external organizations, including ASEAN. Many of these measures, Findings and Observations: however, were not translated into well-developed projects and, therefore, were not realized. Strategy Level Review

Based on the Mid-Term Review of the IMT-GT Roadmap The references to, and perspectives on, ASEAN indicated in for Development: 2007−2011, the implementation of the the strategic frameworks of the GMS, BIMP-EAGA, and roadmap achieved modest results. The lack of focus with IMT-GT subregional programs can be broadly categorized too many flagship projects, absence of sector strategies, and as follows: weaknesses in project preparation and implementation were among the key constraints. In large part, these constraints (i) ASEAN is viewed as providing the regional context of were attributed to weaknesses in the national and regional the subregional program. institutional mechanisms that could have effectively guided (ii) ASEAN goals are explicitly shared by the subregional the process of strategy, program, and project formulation. A program. business process review, thus, became a central component (iii) ASEAN frameworks—such as agreements, of the roadmap’s midterm review process. These, and the memorandums of understanding, and roadmaps— findings of the roadmap’s final assessment, eventually serve as the basis for subregional initiatives. anchored the content of the IMT-GT implementation (iv) ASEAN structures, processes, and mechanisms are blueprint, which was endorsed by the 17th Senior Officials’ utilized in the planning and/or implementation of Meeting and Ministerial Meeting held in August 2010. subregional initiatives.

IMT-GT Implementation Blueprint, 2012–2016. These categories indicate the degree to which the The implementation blueprint featured a well-prepared set subregional programs’ overall strategy frameworks are of projects that would be carried out in the next 5 years. linked to ASEAN dimensions, with the first category being The flagship projects were reduced from 37 in the roadmap the weakest form of link and the fourth being the strongest. to 12, with due focus on five priority economic corridors. A The first category regards ASEAN simply as providing more disciplined process of project inclusion was followed the wider regional context for the subregional program.

strategy and program links 13 Box 4: IMT-GT Roadmap and Implementation Blueprint: Vision, Goals, and Strategic Thrusts and Sectors

Vision A seamless, progressive, prosperous, and peaceful subregion with improved quality of life

Roadmap 2007–2011 Blueprint 2012–2016

Goals (including Flagship projects) • Sustained economic growth • Goals being the same as in the roadmap • Reduced poverty and improved quality of life • Flagship projects reduced to 12, from 37 in the roadmap • Peace and stability

Strategic Thrusts Specific Sector Strategies • Facilitate and promote intra- and inter-IMT-GT trade and investment Strategic thrusts are the same as in the roadmap but given • Promote the growth of agriculture, agro-industry, and sharper focus through the following sector strategies: tourism • Transport: enhanced connectivity focusing on priority • Strengthen infrastructure linkages to support the corridors; and in energy, sustainable development and integration of the IMT-GT subregion ensuring security, reliability, and cost-effectiveness of • Develop human resources and skills competencies, energy supply enhance mobility of labor, and strengthen environment • Trade and investment: results-oriented action in the and natural resource management areas of regulation, public–private sector collaboration, • Strengthen institutional arrangements and mechanisms and provision of business services for cooperation, including public–private sector • Agriculture: reducing constraints to agricultural collaboration, participation of stakeholders at the local investments, coordinating policies and standards, and level, and mobilization of support from development promoting investments in the agriculture supply chain partners • Halal products and services: (i) development of regulatory processes and standards to maintain halal integrity, (ii) development of the halal industry, and (iii) promotion of the IMT-GT halal brand. • Tourism: development of thematic tourism routes, and strategic alliances among the private sector in promoting thematic tourism • Human resource development: development of a competitive work force and improvements in labor mobility

IMT-GT = Indonesia–Malaysia–Thailand Growth Triangle. Source: Compiled from the IMT-GT Roadmap for Development, 2007–2011 and the IMT-GT Implementation Blueprint, 2012–2016.

The second and third categories indicate a closer affinity Based on discussions in the preceding sections, and as with ASEAN goals: a specific role for the subregional summarized in Figure 2, the following observations can be program in attaining these goals, and the utilization of an made: ASEAN framework in a specific strategy or initiative of the subprogram. The fourth category involves use by the GMS, (i) All subregional programs recognize the importance BIMP-EAGA, and IMT-GT subregional programs of an of ASEAN. The “first generation” frameworks of ASEAN mechanism to implement its strategy. The main the three subregional programs broadly saw ASEAN ASEAN perspectives embodied in the strategy frameworks as providing both opportunities and challenges— of these subregional programs were plotted in relation to opportunities from an expanded market, and these four categories as shown in Figure 2. challenges of reducing impediments to access these markets. The GMS Strategic Framework, 2002−2012

14 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Figure 2: Subregional Program Strategies with Reference to ASEAN

AEC BIMP-EAGA ASEAN mechanisms looks at are utilized by ASEAN SEC the regional program to guide and GMS support the IMT-GT seeks BIMP-EAGA indicates Roadmap greater seen as support to ASEAN frameworks integration with deepening Trans-ASEAN serve as basis for BIMP-EAGA ASEAN ASEAN Gas Pipeline subregional initiatives seeks greater integration integration IMT-GT sees with ASEAN itself as BIMP-EAGA GMS seeks GMS helping contributing to IB activities greater ASEAN goals are to narrow the integration BIMP-EAGA ASEAN goals envisaged to explicitly shared by development and vision complement with ASEAN References to ASEAN the subregional program divide helping to narrow the MPAC development IMT-GT helping to BIMP-EAGA CLMV actively CLMV finding divide engaged in ASEAN provides the common narrow the IB activities regional context of the development envisaged to ASEAN supply ground in the chain subregional program GMS divide complement MPAC 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

GMS Strategic Framework I GMS Strategic Framework II BIMP-EAGA BIMP-EAGA Roadmap Blueprint IMT-GT IMT-GT Roadmap Blueprint

AEC = ASEAN Economic Community; ASEAN = Association of Southeast Asian Nations; BIMP-EAGA = Brunei Darussalam−Indonesia−Malaysia− Philippines East ASEAN Growth Area; CLMV = Cambodia, the Lao People’s Democratic Republic, Myanmar, Viet Nam; GMS = Greater Mekong Subregion; IB = implementation blueprint; IMT-GT = Indonesia−Malaysia−Thailand Growth Triangle; MPAC = Master Plan on ASEAN Community; SEC = secretariat; REG = regional; TA = technical assistance. Source: ADB TA 7718-REG Study Team.

(SF-1), which preceded the launch of the AEC in development gap—an aspiration also articulated in 2007, saw ASEAN’s expanded membership as an the objective of GMS SF-1 for CLMV to “catch-up” opportunity and a challenge for Cambodia, the Lao with the rest of ASEAN. PDR, Myanmar, and Viet Nam (CLMV), which had (iii) The launch of the AEC in 2007 provided a definitive just joined ASEAN at that time. SF-1 defined the role anchor around which the strategies of the subregional that regional cooperation can play for CLMV to work programs began to evolve. The BIMP-EAGA roadmap, together on common ground as transition economies which coincided with the year of the AEC launch in on the path to market opening and expansion. The 2007, articulated the participating countries’ desire BIMP-EAGA Roadmap to Development, 2006−2010 to integrate their economies more fully, consistent referred to the goal of developing the subregion’s with AEC goals. The IMT-GT roadmap, which also competitive advantage for the wider regional and began in 2007, reflected measures that were clearly global market, and not only directed within the supportive of AEC initiatives. Much later in 2011, subregion. The IMT-GT Roadmap for Development, when the GMS Strategic Framework, 2012−2022 2007−2011 referred to the need to complement and (SF-II) was endorsed, a clear reference was made to work more closely with ASEAN. the need to link with the ASEAN integration agenda, (ii) ASEAN’s goal of narrowing the development divide and to seek a unique role for the GMS Program in was recognized in the strategy frameworks of the three contributing to this goal. SF-II now sees CLMV as subregional programs. The BIMP-EAGA roadmap active participants in the regional supply chain, having and, to a lesser extent, the IMT-GT roadmap advanced well into the process of market transition. were quite explicit in their goal of narrowing the

strategy and program links 15 (iv) The link with the ASEAN economic integration Operational Level Review of agenda has become more pronounced in the “second Selected Sector Initiatives generation” strategy frameworks.10 This was evident in concrete subregional sector initiatives that began to link more consciously with specific ASEAN A review of selected connectivity areas was conducted to agreements or frameworks. For instance, the GMS see how the links at the program-wide level translated into SF-II made specific reference to supporting the Trans- initiatives at the operation level. Physical connectivity in ASEAN Gas Pipeline. Planned improvements in the transport and energy, and institutional connectivity in transport memorandums of understanding in the transport and trade facilitation, were selected. These are BIMP-EAGA Implementation Blueprint, 2012−2016 high priority sectors in the subregional programs and are converging with the ASEAN’s trajectory for comprise the bulk of their projects and activities. However, integrating the transport services sector. The the review of these areas was not in the nature of a sector IMT-GT Implementation Blueprint, 2012−2016 analysis, which means that the review did not make an guidelines stipulate that projects must be supportive assessment of the soundness of the strategies and programs. of the MPAC. Across all the second generation Instead, the review focused on where ASEAN and the frameworks, the proximity of the AEC in 2015 seems subregional programs converge in coverage and approach, to have prodded a greater sense of urgency to accelerate and the circumstances underpinning their convergence (or the integration process, which was also evident in key divergence). sectors. (Details are discussed in the next section.) (v) Among the subregional programs, BIMP-EAGA has As previously mentioned, ASEAN’s centrality warranted a explicitly declared itself to be a subset of ASEAN, greater focus on the vertical links (subregional programs and has consistently brought this relationship to with ASEAN) relative to the horizontal links (among the bear in the design of its various initiatives. This subregional programs). The latter has a narrower basis strong link was stated in the BIMP-EAGA roadmap, because the three subprograms differ fundamentally in which also called for the involvement of the ASEAN the level and autonomy of the participating entities—in Secretariat in refining the roadmap in the course of the case of national governments in the GMS, and local its implementation, and in guiding the various EAGA governments in BIMP-EAGA and IMT-GT. In addition, initiatives through linkages with the appropriate these three subprograms are each driven by unique ASEAN bodies. As mentioned earlier, this role has economic, socio-cultural, and geopolitical circumstances. not been fully performed by the ASEAN Secretariat. Notwithstanding this, the three subregional programs can Therefore, the BIMP-EAGA implementation learn valuable lessons from each other in the conduct of blueprint no longer mentions the role of the regional cooperation. These lessons are mentioned in this ASEAN Secretariat. section.

The above observations indicate the important role that the AEC has played as a galvanizing factor in bringing the Transport Connectivity subregional programs closer to the ASEAN framework. In particular, the AEC Blueprint provided a good indication of ASEAN Transport Connectivity Strategy. ASEAN the key milestones to which the subregional programs could transport cooperation is guided by the ASEAN Strategic anchor. The rapid growth of individual ASEAN Member Transport Plan (ASTP), 2011–2015,11 which covers land, States and their integration into global markets are factors maritime, and air transport; and transport facilitation and that also weighed on the need to align subregional processes logistics services. Cooperation in these sectors is further with that of the AEC. However, it must be emphasized defined by specific ASEAN agreements and ministerial that even without specific references to ASEAN, the goals understandings (e.g., ASEAN Highway Network) and of the three subregional programs converge with those of roadmaps (for air, maritime, and logistics sectors). From ASEAN in many instances, as the goals of development and cooperation are generally universal in nature.

10 The “second generation” frameworks refer to the (i) GMS Strategic Framework, 2012–2022, (ii) BIMP-EAGA Implementation Blueprint, 2012–2016, and (iii) IMT-GT Implementation Blueprint, 2012–2016. 11 This is also referred to as the Brunei Action Plan (BAP).

16 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Table 2: ASEAN Strategic Transport Plan, 2011–2015: Goals, Strategic Thrusts, and Key Actions

Goals Strategic Thrusts Key Actions Land Transport • Establishing efficient, integrated, safe, • Improving land transport infrastructure • Complete missing links in the ASEAN and environmentally sustainable regional integration and intermodal interconnectivity Highway Network land transport (road and railway) corridors with principal airports, ports, and inland • Implement the Singapore−Kunming Rail linking all members and neighboring waterways and ferry links Link trading partners • Coordinating efforts at policy and • Establish efficient and integrated inland operational levels for land transport trade waterways network corridors Air Transport • Establishing a regional open skies • Implementing the regional plan on • Work on the formulation of an ASEAN arrangement to support regional economic ASEAN Open Sky Policy, on a staged and Single Aviation Market integration progressive basis • Implement the Roadmap for the Integrated • Achieving globally acceptable standards in • Promoting satellite-based air navigational Air Travel Sector, and ratify the multilateral aviation security and safe and automatic sensing systems to control agreements on liberalization of air freight air traffic and improve safety in airspace and passenger services Maritime Transport • Formulating and implementing a common • Formulating and implementing a common • Revitalize efforts for an ASEAN Single regional shipping policy regional shipping policy Shipping Market • Improving maritime safety and security and • Improving maritime safety and security • Enhance the capacity of 47 ASEAN protection of the marine environment by and protection of the marine environment designated ports enhancing cooperation among the ASEAN by facilitating the acceptance and • Establish efficient and reliable shipping Member States to facilitate the acceptance implementation of IMO conventions routes and implementation of the International • Establish connections between mainland Maritime Organization (IMO) conventions and archipelagic Southeast Asia Transport Facilitation • Creating an integrated and efficient • Operationalizing the ASEAN Framework • Establish a multimodal transport system to logistics and multimodal transportation Agreement on the Facilitation of Goods make ASEAN the transport hub system, for cargo movement between in Transit, Inter-State Transport and • Develop multimodal transport corridors for logistics bases and trade centers within Multimodal Transport parts of ASEAN to function as bridges in and beyond ASEAN • Enhancing capacity and skills development the global supply chains for transport facilitation • Complete the East–West Economic Corridor • Conceptual planning for an integrated • Promote the Mekong–India Economic intermodal transport network in ASEAN Corridor as a land bridge ASEAN = Association of Southeast Asian Nations. Source: ASEAN Secretariat. 2010. ASEAN Strategic Transport Plan, 2011–2015. Jakarta. the ASTP, MPAC highlights a set of priority physical regional transport system. Beyond improving the density connectivity projects to be implemented by 2015.12 and standards of ASEAN’s internal transport network, the ASTP sets the goal of making ASEAN the transport hub In supporting the goals of the AEC, the ASTP builds on of the region, taking advantage of its geographic location previous plans of actions and existing sector frameworks in relation to the burgeoning economies of South Asia and by moving the strategic direction of transport connectivity. Northeast Asia. The key elements of the ASTP 2011−2015 From establishing physical links, it liberalized transport are summarized in Table 2, and discussed in more detail in services toward the goal of a seamless, safe, and integrated the sections on land, rail, maritime, and air connectivity.

Corridor Development in the Subregional Programs. 12 The MPAC reflects a narrower but focused set of priorities relative to the ASTP, The subregional programs have developed sector strategies which is the broader framework for ASEAN cooperation in the transport sector. Although the strategic thrusts of transport cooperation reflected in the two for various modes of transport, but the strategies have documents are consistent, ASTP reflects a more comprehensive list of actions revolved around well-defined geographic spaces or corridors. based on sector roadmaps. Meanwhile, the MPAC mainly highlights those projects The subregional strategies and priority actions for road, rail, that can be realistically achieved by 2015. In identifying the links, therefore, the ASTP and ASEAN action plans in the different sectors provide a better source of maritime, and air transport converge in the subregional information than the MPAC. corridors. The subregional corridors have become the main

strategy and program links 17 platforms through which the subregional programs are able relatively easier to connect, the countries comprising the to translate the ASEAN goals into concrete results. BIMP-EAGA and IMT-GT are far more geographically dispersed across land masses and bodies of water. Because of The development strategy for each corridor is shaped its archipelagic geography, BIMP-EAGA has given priority by various factors—geography, proximity to gateway to the development of maritime and air connectivity in ports, trade destinations, traded commodities, resource two specific corridors: (i) West Borneo Economic Corridor endowments, and complementarities, among others. (WBEC), and (ii) Greater Sulu Sulawesi Economic Corridor Some transport routes are configured to specifically (GSSC). At the 4th BIMP-EAGA Summit in November address trade goals, value-chain connectivity, or logistics 2007 when these corridors were endorsed, BIMP-EAGA services connectivity. Other routes are configured to was declared an economic corridor within ASEAN. address broader development objectives, such as the overall economic development of an area by stimulating Economic corridor development in BIMP-EAGA is investments and production capacity linked to trade with basically aimed at developing trade corridors and enhancing potential impact on increasing employment and incomes, value-chain connectivity. WBEC is considered to be the oil and reducing poverty. and gas corridor of EAGA where areas traversed in Brunei Darussalam, Sabah, and West Kalimantan are major Corridor development in the GMS. The first decade of the exporters of crude petroleum and natural gas. GSSC is a GMS Program achieved substantial progress in establishing maritime corridor covering North Sulawesi in Indonesia, physical connectivity along three priority corridors: Sabah in Malaysia, and Mindanao and Palawan in the (i) East–West Economic Corridor (EWEC), (ii) North– Philippines, where connectivity consists of port-to-port South Economic Corridor (NSEC), and (iii) Southern trade flows and shipping services across the Sulu Sulawesi Economic Corridor (SEC). Many of the critical road links Sea. Ten of the 12 priority infrastructure projects included in these corridors are now in place. Building upon physical in the BIMP-EAGA Implementation Blueprint, 2012–2016 connectivity that enabled increased cross-border traffic are located in these two corridors. The BIMP-EAGA along these routes, the GMS strategy for its second decade blueprint would also take measures to strengthen land, focuses on (i) transforming these corridors into economic air, and maritime transport services through improved and corridors by linking them with production and trade; liberalized services. (ii) expanding transport links to outside the subregion; and (iii) building an integrated multimodal transport system Corridor development in IMT-GT. The connectivity that includes rail, air, and inland waterways. strategy of IMT-GT, like BIMP-EAGA, also has a predominantly inward focus. To further enhance Internal connectivity can continue to be strengthened by connectivity within the subregion, five priority economic opening more border crossings and increasing network corridors that combine land and maritime connectivity density. At the same time, external links can be expanded have been identified: (i) Extended Songkhla–Penang– through new transport corridors13 to enhance connectivity Medan Corridor (EC1), linking the agriculture-rich with India via Myanmar, and farther into the People’s provinces of southern Thailand with Malaysia, Sumatra, Republic of China (PRC) via route connections in the and Singapore; (ii) Straits of Malacca Corridor (EC2), Lao PDR, Thailand, and Viet Nam. A regional investment covering the western coastal belt from Trang in southern framework is being prepared to succeed the GMS Thailand to Melaka in Peninsular Malaysia; (iii) Banda Vientiane Plan of Action, 2008–2012 (VPOA), which has Aceh–Medan–Pekanbaru–Palembang Economic Corridor so far guided investments in priority sectors that include (EC3), a road corridor running south to north through transport. Sumatra; (iv) Melaka–Dumai Economic Corridor (EC4), linking Sumatra and Peninsular Malaysia; and (v) Ranong– Corridor development in BIMP-EAGA. Compared Phuket–Aceh Economic Corridor (EC5), aiming to to the GMS, whose contiguous land mass makes it enhance connectivity between Sumatra and southern Thailand primarily through maritime mode. 13 The GMS Transport Sector Strategy 2006–2015: Coast to Coast and Mountain to Sea: Toward Integrated Mekong Transport Systems identified nine corridors, Only modest progress has been achieved in developing including the three that are in place. These nine corridors are: (i) North–South the physical infrastructure in these corridors under the Corridor (Kunming–Bangkok), (ii) Eastern Corridor (Kunming–Ho Chi Minh City), (iii) EWEC (Mawlamyine–Danang), (iv) SEC (Dawei–Quy Nhon/Vung IMT-GT Roadmap for Development, 2007–2011. However, Tau), (v) Southern Coastal Corridor (Bangkok–Nam Can), (vi) Central Corridor under the IMT-GT Implementation Blueprint, 2012–2016, (Kunming–Sihanoukville/Sattahip), (vii) Northern Corridor (Fangcheng–Tamu), 11 priority infrastructure projects with a total estimated cost (viii) Western Corridor (Tamu–Mawlamyine), and (ix) Northeastern Corridor (Nanning–Bangkok/Laem Chabang). The three corridors in place are EWEC, of $5.2 billion have been identified for implementation. Of NSEC, and SEC. the 11 projects, 10 are located in the five priority economic

18 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt corridors. These comprise roads; ports; distribution potential for developing into a full-fledged economic centers; customs, immigration, and quarantine facilities; corridor, have influenced the physical and institutional and power projects. connectivity approaches taken by the subregional programs.

Within the IMT-GT, connectivity between Malaysia and The GMS Program focused initially on physical Thailand is well developed, while that within Sumatra connectivity and cross-border facilitation owing to is generally weak. Land transport development within its land-based geography. With most of the transport Sumatra is also underdeveloped, and needs to be improved infrastructure requirements in place, the GMS Program is through a combination of road and railway investments. currently focused on developing transport corridors into In Malaysia and Thailand where the condition of the roads full-fledged economic corridors. The strategy and action are better, the priority is on road improvements to cope plans for the three corridors have been developed, and with increased traffic volume and economic activity from are being coordinated through the Economic Corridors industrial development in order areas. Forum with the involvement of all concerned stakeholders. The number of priority corridors has also expanded from Development orientation of subregional corridors. three to nine, with routes that would connect to South Table 3 highlights the development strategies that underpin Asia, and within the GMS, in particular, more intensively the subregional priority corridors. The binding constraints with the PRC. Moreover, the GMS is also expanding land that define the characteristics of a corridor, as well as their connectivity through rail links and other transport modes

Table 3: Development Strategies of Priority Subregional Corridors Corridor or Route Development Strategy Greater Mekong Subregion (GMS) East–West Economic Corridor (EWEC) EWEC has both a developmental and commercial objective. Its (i) Mawlamyine–Myawaddy developmental objective is to link the main artery of the corridor on (ii) Mae Sot–Phitsanulok–Khon Kaen–Kalasin– Mukdahan the horizontal axis with secondary road systems in rural communities (iii) Savannakhet–Dansavanh and some of the poorer areas. The commercial objective is to expand (iv) Lao Bao–Dong Ha–Hue-Danang production and cross-border trade. The main artery connects to gateway nodes at Danang Port (Viet Nam) to Mawlamyine (Myanmar) that connect to external markets. EWEC’s intersection with several north–south arterial routes expands trading routes and lowers risks and distribution costs. North–South Economic Corridor (NSEC) NSEC is a “natural economic corridor” in the GMS because the (i) Kunming–Chiang Rai–Bangkok multimodal transport and infrastructure network in the subregion has (ii) Kunming–Ha Noi–Hai Phong a general north–south orientation. It is well positioned to serve as a (iii) Nanning–Ha Noi via the Youyi Pass or Fangcheng–Dongxing– gateway for ASEAN–People’s Republic of China (PRC) trade on account Mong Cai of its strategic location that links the PRC with Thailand and Viet Nam. It also intersects the EWEC in Thailand’s Tak and Phitsanulok provinces, thus providing access to the Andaman Sea. Southern Economic Corridor (SEC) SEC links three major cities—Bangkok, Phnom Penh, and Siem Reap. (i) Bangkok–Phnom Penh–Ho Chi Minh City–Vung Tau SEC is economically diversified in terms of income and economic (ii) Bangkok–Siem Riep–Stung Treng–Rathanakini–O Yadov– structure, natural resource endowments, and labor markets. SEC Pleiku–Quy Nhon allows many complementarities that could be pursued to promote its (iii) Bangkok–Trat-Koh Kong–Kampot–Ha Tien–Ca Mau City–Nam development. These complementarities provide a good base for the Can development of production networks that could be plugged into global value chains. It has the necessary drivers of growth, including markets, agricultural and industrial base, and world class tourism assets. Brunei Darussalam−Indonesia−Malaysia−Philippines East ASEAN Growth Area (BIMP-EAGA) West Borneo Economic Corridor (WBEC) WBEC is considered as the oil and gas corridor of EAGA where three (i) Pontianak Port–Kuching Port of four focal areas are major exporters of crude petroleum and natural (ii) Kuching–Bandar Seri Begawan gas. The corridor also hosts major exporters of forestry products. (iii) Bandar Seri Begawan–Kota Kinabalu Imports of the focal areas include food, machinery and equipment, and manufactured goods. Light manufacturing, palm oil processing, wood- based processing, and tourism are common areas of opportunities. Brunei Darussalam and Labuan (Malaysia) both have the potential of becoming financial hubs for the subregion.

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strategy and program links 19 Table 3 continued Corridor or Route Development Strategy Greater Sulu Sulawesi Corridor (GSSC) GSSC is a maritime corridor covering North Sulawesi in Indonesia, (i) Palawan–Sabah Sabah in Malaysia, and Mindanao and Palawan in the Philippines. (ii) Zamboanga Peninsula–Sabah GSSC is mainly determined by the geography of the Sulu Sulawesi Sea. (iii) Zamboanga Peninsula–Sabah (through the island provinces of Very strong historical trade links characterize this corridor with trade Basilan, Sulu, and Tawi-tawi in the Philippines) concentrated between North Sulawesi and Mindanao, and between (iv) Davao area (Davao del Sur Province) Sabah and Mindanao. GSSC is also the nerve center of barter trade (v) General Santos–North Sulawesi in EAGA where agriculture and aquaculture trade is fairly advanced. Transport connectivity in GSSC consists of port-to-port trade flows and shipping services within the Sulu Sulawesi Sea. Indonesia−Malaysia−Thailand Growth Triangle (IMT-GT) Extended Songkhla–Penang–Medan Corridor (EC1) EC1 hosts some of the most agriculture-rich provinces in southern Thailand that trade with Malaysia, Sumatra, and Singapore, and plays an important role in the supply chain of traded goods outside the subregion. EC1 covers several provinces in the border areas of these two countries. It can serve as the anchor for clustering major economic activities through the development of industrial hubs and special economic zones. Straits of Malacca Corridor Due to the proximity of this corridor to Sumatra, there is considerable (Trang–Satun–Perlis–Penang–Port Klang–Malacca) (EC2) potential for complementation in various stages of the production chain with this province, especially if a series of economic and industrial zones were established at strategic points along EC2. This corridor has the potential to serve as a food hub, especially for halal, since a number of food terminals and integrated food centers are being planned within the corridor. Banda Aceh–Medan–Pekanbaru–Palembang Economic Corridor EC3, which is part of the Association of Southeast Asian Nations (ASEAN) (EC3) Highway Network, is of critical importance for developing Sumatra. It is also an important building block for further enhancing connectivity within the IMT–GT subregion. Its development is closely linked with that of the other three corridors. Melaka–Dumai Economic Corridor (EC4) EC4, a maritime corridor, has a long tradition of freight and passenger traffic between Sumatra and Malaysia. Dumai is the gateway port of Riau Province, one of the richest provinces of Indonesia with abundant palm oil plantations and onshore oil and gas resources. Dumai is principally a palm-oil-related export port with general cargo, fertilizer, cement, and rice being the main import traffic. Ranong–Phuket–Aceh Corridor (EC 5) EC5 is envisaged to enhance the connectivity between Sumatra and southern Thailand, primarily through maritime mode. Connectivity will be established through the development of facilities in key ports in Sumatra. Sources: Compiled from ADB. 2008. GMS Vientiane Plan of Action. Unpublished; ASEAN Secretariat. 2008. Master Plan on ASEAN Connectivity. Jakarta; ASEAN Secretariat. 2011. ASEAN Strategic Transport Plan, 2011–2105. Jakarta; Centre for IMT-GT Subregional Cooperation. 2012. IMT-GT Implementation Blueprint 2011–2016. Putrajaya; and (v) BIMP-EAGA Facilitation Centre. 2012. BIMP-EAGA Implementation Blueprint 2012–2016. Kota Kinabalu.

toward an integrated multimodal transport system. The and value-chain corridors in BIMP-EAGA and IMT-GT, long-term challenge for GMS is to realize the economic the private sector has played an active role in undertaking corridor transformation process, and align with ASEAN in complementary investments in cross-border facilities, developing the regulatory framework and standards for an logistics, and other related business services. The private integrated multimodal transport system. sector has, in fact, performed a dominant role in the two subprograms, as it was envisaged when these programs The BIMP-EAGA and IMT-GT corridors are basically were established. transport and trade corridors. Initiatives of the two subregional programs put emphasis on the liberalization Role of subregional corridors in ASEAN connectivity. of land, maritime (including for RoRo ferry), and air Corridor development under the subregional programs transport services, which coincide more closely with the plays an important role in ASEAN transport connectivity. ASEAN initiatives toward transport services liberalization, By defining corridors based on area-specific features market access, and integration. In developing the trade and circumstances and focusing on their development

20 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt through cooperation, the subregional programs are able standards,14 construction of all missing links, and to translate the goal of ASEAN connectivity into specific operationalization of all cross-border points by 2004 area contexts, and direct it to achieve specific development objectives. Economic corridor development under the Stage 3: Upgrading of all designated routes to at least Class I subregional programs has contributed to accelerating the standards and upgrading of low traffic volume non-arterial pace of ASEAN connectivity, and has laid the important routes to Class II standards by 2020 foundation for ASEAN to begin expanding its links outside the region. Although considerable progress has been made by the ASEAN Member States in expanding the length and The GMS, in particular, has made an important upgrading the road quality of their highways, there are still contribution by building the infrastructure needed to several missing links and sections that are below Class III connect ASEAN with the PRC, and farther to the west, to standards. Based on a study by the Economic Research South Asia via Myanmar. Economic corridor development Institute for ASEAN and East Asia (ERIA), the AHN’s in BIMP-EAGA and IMT-GT, although challenged by length had expanded to about 97.4% of the desired AHN the archipelagic geography of the subregion, has greatly by 2008, but half of the network still consists of Class III improved the environment for trade and investment and and below road standards. Most of the missing links are contributed to ASEAN’s goal of narrowing the development located in Myanmar (201 km), while the road segments divide. Through their participation in subregional below Class III standards (5,300 km) on transit transport programs, the ASEAN Member States are accorded the routes (TTRs)15 are located in Indonesia, the Lao People’s flexibility to proceed multitrack and multispeed through Democratic Republic (Lao PDR), Malaysia, Myanmar, smaller and more flexible arrangements. and Viet Nam.16 Thirty-five TTRs have been identified under the AHN to indicate the sections deemed important Despite differences in the orientation of corridors, all in facilitating goods in transit and accorded priority three subregional programs are presently moving toward for upgrading or construction. Roads below Class III an integrated transport system consistent with ASEAN’s standards on these TTRs are mostly located in Indonesia, trajectory. This suggests the benefits of coordinating the Lao PDR, and Myanmar. and unifying efforts at the subregional level with those of ASEAN, particularly with respect to the setting of The extent to which the AHN physically links the ASEAN technical, safety, security, and environmental standards. Member States is indicated by the number of cross-border Individual member countries will also need to accelerate links in the AHN routes (Table 4). This in turn depends on the ratification and implementation of various protocols the number of borders that a country has with its neighboring pertaining to the liberalization of transport services. countries. Thailand has the most number of linkages—13 ASEAN, for its part, will have to determine the operational in all—with four neighboring countries (Cambodia, the support that it can extend to the subregional programs Lao PDR, Malaysia, and Myanmar). The Lao PDR follows (e.g., technical and financial assistance, or mobilization) with 11, Malaysia with seven, and Cambodia with four. It to help accelerate project implementation and, ultimately, is noted that despite sharing its borders, the Lao PDR and integration with ASEAN goals. Myanmar do not have any highway linkages between them. The two countries are connected by AH2 and AH3 passing ASEAN Highway Network. ASEAN’s program for through Thailand (footnote 15). land-based connectivity is centered on the completion of the ASEAN Highway Network (AHN), which has Apart from road links, the AHN also comprises ferry links been a flagship project since 1999 when the Ministerial for connectivity across seas or rivers. In total, there are Understanding on the AHN was signed. The AHN is seven ferry links in three ASEAN countries that are part essentially an expansion within ASEAN of the Trans- of the AHN (Table 5). These ferry links are important for Asian Highway Network, spanning a total length of connectivity with the AHN in the archipelagic subregions. 38,400 kilometers (km) and covering 23 designated routes. As embodied in the Ministerial Understanding, the AHN 14 will be developed in three stages: AHN follows the Asian Highway Standards, which include Primary: access- controlled highways, asphalt or cement concrete; Class I: 4 or more lanes, asphalt or cement concrete; Class II: 2 lanes, asphalt or cement concrete; Class III: 2 lanes, Stage 1: Network configuration and designation of national double bituminous treatment. http://www.unescap.org/ttdw. routes to be completed by 2000 15 The AHN has identified 35 TTRs where road upgrading is considered essential for the facilitation of transport of goods in transit and the broader goal of ASEAN integration. Stage 2: Installation of road signs at all designated routes, 16 Economic Research Institute for ASEAN and East Asia (ERIA). 2010. Final Report: upgrading of all designated routes to at least Class III The ASEAN Strategic Transport Plan, 2011–2015. Jakarta.

strategy and program links 21 Table 4: Number of ASEAN Highway Cross-Border Links between Member States Brunei Member States Darussalam Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Brunei Darussalam √(2) Cambodia √(1) √(2) √(1) Indonesia √(2) Lao PDR √(1) √(5) √(5) Malaysia √(2) √(2) √(1) √(2) Myanmar √(4) Philippines Singapore √(1) Thailand √(2) √(5) √(2) √(4) Viet Nam √(1) √(5) Total No. of Linkages 2 4 2 11 7 4 0 1 13 6 Total Country Linkages 1 3 1 3 4 1 0 1 4 2 ASEAN = Association of Southeast Asian Nations, Lao PDR = Lao People’s Democratic Republic. Notes: (1) √ means that there is a physical highway link between the two countries. (2) The number in parenthesis indicates the number of physical highway links between the two countries. Source: Economic Research Institute for ASEAN and East Asia. 2010. Final Report: ASEAN Strategic Transport Plan, 2011–2015. Jakarta.

Table 5: Ferry Links in ASEAN Member States in the ASEAN Highway Network Length of Ferry Links Member States Route No. Origin–Destination (kilometer) Cambodia AH1 Mekong River Ferry Crossing–Neak Loeung 1.5 AH11 Rapeangkreal (border of the Lao PDR)–Stung Treng 0.7 Indonesia AH2 Gilimanuk Terminal–Banyuwangi Terminal 8.0 AH25 Bakauheni Ferry Terminal–Merak Ferry Terminal 26.0 Philippines AH26 Matnog Terminal–Allen Terminal 25.0 Ormoc Terminal–Cebu Terminal 65.0 Liloan Ferry Terminal–San Francisco Madilao Port 60.0 AH = ASEAN Highway, ASEAN = Association of Southeast Asian Nations, Lao PDR = Lao People’s Democratic Republic. Source: Economic and Social Commission for Asia and the Pacific website as cited in Economic Research Institute for ASEAN and East Asia. 2010. Final Report: ASEAN Strategic Transport Plan, 2011–2015. Jakarta.

The Mekong River Ferry Crossing at Neak Leoung, a (ii) Indonesia: Gilimanuk Terminal–Banyuwangi GMS project, is constructing the remaining sections of Terminal (8 km) on AH2; Bakauheni Ferry Terminal– the Phnom Penh to Neak Leoung Road, and it includes Merak Ferry Terminal (26 km) on AH25; and a component for the construction of a Mekong bridge at (iii) Philippines: Matnog Terminal–Allen Terminal (25 Neak Leoung. km) on AH26, Ormoc Terminal–Cebu Terminal (65 km) on AH26, and Liloan Ferry Terminal–San There are plans to further develop connectivity of intra- Francisco Madilao Port (60 km) on AH26. ASEAN ferry links with ASEAN highways. The ASTP, 2011–2015 indicates plans to conduct studies on the ASEAN Highway Network in the subregional following priority routes: programs. As indicated in the Master Plan on ASEAN Connectivity (MPAC), the strategy for completing the (i) Cambodia: Stung Treng–Thalaboriwat (2 km) on AHN is to (i) construct the missing links in Myanmar, AH11; and (ii) upgrade the sections below Class III standards

22 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Table 6: ASEAN Highway Network Routes in the MPAC and ASTP, 2011–2015 for Construction and Upgrading, and their Inclusion in the GMS, BIMP-EAGA, and IMT-GT Programs

AHN Routes in MPAC and ASTP Inclusion in GMS, BIMP-EAGA, and IMT-GT Completion of missing links in Myanmar Most sections for construction in Myanmar are not included in the • AH112: Thaton–Mawlamyine–Lehnya–Khong Loy (60 km) GMS VPOA, 2008–2012. • AH123: Dawei–Maesameepass (141 km) Upgrading of routes below Class III in transit transport routes Lao PDR • AH12: Nateuy–Oudomxai–Luang Prabang (393 km) Most sections for upgrading in Myanmar (AH1, AH2, and AH3), • AH 15: Ban Lao-Namphao (98 km) and in the Lao PDR (AH12 and AH15) are not included in the GMS Myanmar VPOA, 2008–2012. Although AH12, Vientiane–Luang Prabang, is not • AH1: Tamu–Mandalay–Bago–Myawaddy (781 km) included in the VPOA, this route is part of the Central Corridor in the • AH2: Meiktila–Loilem–Kyaington–Tachilek (593 km) GMS expanded nine-corridor network. • AH3: Mongla–Kyaing Tong (93 km) Indonesia • AH25: Banda Aceh–Medan–Pekanbaru-Jambi–Palembang–Lampung The sections for upgrading in Indonesia (AH25) are included in the Bakauheni–Merak (141.55 km)a IMT-GT Implementation Blueprint, 2012–2016. Upgrading of other routes below Class IIIa • Indonesia: AH150 (1,762.3 km) and AH151 (611.9 km) Most sections in Indonesia (AH150 and AH151) are in the IMT-GT • Lao PDR: AH131 (96 km) and AH132 (126 km) Implementation Blueprint, 2012–2016. • Malaysia: AH150 (40 km) • Myanmar: AH111 (239 km) and AH112 (1,085 km) Most sections in the Lao PDR (AH131 and AH132), Myanmar • Viet Nam: AH13 (215.5 km) by 2011 and AH132 (160 km) by (AH111 and AH112), and Viet Nam (AH13 and AH132) are not 2012 included in the VPOA, 2008–2012.

The sections in Malaysia (AH150) are not included in the BIMP-EAGA Implementation Blueprint, 2012–2016. AH = ASEAN Highway, AHN = ASEAN Highway Network, ASEAN = Association of Southeast Asian Nations, ASTP = ASEAN Strategic Transport Plan, BIMP-EAGA = Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area, GMS = Greater Mekong Subregion, IMT-GT = Indonesia–Malaysia–Thailand Growth Triangle, km = kilometer, Lao PDR = Lao People’s Democratic Republic, MPAC = Master Plan on ASEAN Connectivity, VPOA = Vientiane Plan of Action. a AHN routes listed in the MPAC are those for upgrading in Myanmar and routes below Class III standards in transit transport routes. These are also listed in the ASTP, 2011–2015, with an added set of routes below Class III. Sources: ASEAN Secretariat. 2010. Master Plan on ASEAN Connectivity. Jakarta; ASEAN Secretariat. 2011. ASEAN Strategic Transport Plan, 2011–2105. Jakarta.

on TTRs located in the Lao PDR and Myanmar. In the action plans of the subregional programs, there are other ASTP another category was included: upgrading of other projects in these action plans that form part of the AHN. Class III roads in Indonesia (AH25, AH150, and AH151), In the GMS, these include the (i) Mae Sot–Mukdahan Malaysia (AH150), and Viet Nam (AH13 and AH132). Upgrading, and (ii) North–South Economic Corridor Table 6 shows the AHN routes identified for construction International Mekong River Bridge (Chiang Khong– or upgrading in the MPAC and ASTP, and the status of Houyxay bridge). Similarly, there are projects in the their inclusion in the GMS, BIMP-EAGA, and IMT-GT IMT-GT implementation blueprint that relate to some action plans. With the exception of the Asian Highway parts of the AHN, such as Bukit Kayu Hitam and Rantau sections in Sumatra, Indonesia that are included in the Panjang in Malaysia that are part of the economic corridor IMT-GT implementation blueprint, most sections for (EC1). The BIMP-EAGA implementation blueprint construction and upgrading in the Lao PDR, Myanmar, includes routes along Sungai Tuju (Brunei Darussalam) and and Viet Nam are not in the GMS VPOA, and those in Kuching–Tebedu (Malaysia) that are part of West Borneo Malaysia are also not in the BIMP-EAGA implementation Economic Corridor (WBEC); and routes in General blueprint. Some of the countries may not have included Santos and Zamboanga City (the Philippines) that are part the upgrading of their respective AHN components in the of Greater Sulu Sulawesi Corridor (GSSC). subregional programs because these are considered national projects and are being funded by their national budgets. Looking into the AHN system as a whole, it is observed that around half of the AHN routes for upgrading under ASTP Although most of the AHN sections identified in the contain sections that are either part of or link to areas that MPAC and ASTP are not specifically reflected in the are part of the priority subregional corridors (Appendix A).

strategy and program links 23 Of these routes, two-thirds are located in the GMS, of a cross-border highway link between the Lao PDR owing to the predominance of the road transport mode and Myanmar, despite shared borders, should be given in the subregion. Further upgrading of the AHN sections particular attention. BIMP-EAGA and IMT-GT can also (including those belonging to Class II and III standards) play an important role in further developing connectivity will help accelerate corridor development and contribute to of intra-ASEAN ferry links with the ASEAN highways. transport and trade facilitation in the affected areas. Singapore–Kunming Rail Link. The Singapore– ASEAN Highway Network and the subregional Kunming Rail Link (SKRL) has been a flagship project corridors. Considerable potential synergy can be generated of the ASEAN–Mekong Basin Development Cooperation through a more purposive linkage between ASEAN’s since 1995; it is currently reflected in the MPAC and the program for completing the AHN and the development of ASTP. The project was conceived to expand rail links in the subregional corridors. The current AHN priorities reflect ASEAN Member States—from the present three (Singapore, the need to meet the minimum requirements of connectivity Malaysia, and Thailand) to seven (Cambodia, Lao PDR, and road standards in ASEAN (i.e., completing the missing Myanmar, and Viet Nam) (Table 7). Once completed, links and upgrading to the minimum Class III standards), cross-border rail links would have been established between and many of the AHN routes are being implemented as seven cross-border points in the following: national projects. For this reason, it is not surprising that the AHN routes were not included in the action plans of (i) Cambodia and Thailand, the subregional programs. (ii) Cambodia and Viet Nam, (iii) Lao PDR and Thailand, There is scope, however, for expanding the AHN priorities (iv) Lao PDR and Viet Nam, to focus on upgrading routes to Class II or I standards (v) Malaysia and Singapore, where applicable and, in particular, on those sections that (vi) Malaysia and Thailand, and are essential to accelerating corridor development in the (vii) Myanmar and Thailand. subregions. Moreover, the upgrading of TTRs along the corridors should be considered in determining priorities The main route of SKRL passes through Singapore– for upgrades. Cross-border highway links are also essential Malaysia–Thailand–Cambodia–Viet Nam–the PRC to establishing basic connectivity among the ASEAN (Kunming) with spur lines in Thailand–Myanmar and Member States and should be an important consideration Thailand–Lao PDR. It utilizes existing railway networks in in the future expansion of the AHN routes. The absence relevant ASEAN member countries for interconnection and

Table 7: Cross-Border Rail Links Before and After the Singapore–Kunming Rail Link

Brunei Country Darussalam Cambodia Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam Brunei Darussalam Cambodia √(1)* √(1)* Indonesia Lao PDR √(1)* √(1)* Malaysia √(1) √(2) Myanmar √(1)* Philippines Singapore √(1) Thailand √(1)* √(1)* √(2) √(1)* Viet Nam √(1)* √(1)* Lao PDR = Lao People’s Democratic Republic. Notes: (1) √ means that there is a physical rail link between the two countries. (2) *means that the link between the two countries would have been established after the completion of the Singapore−Kunming Rail Link. (3) A blank cell means that physical rail links are either non-existent or not applicable. (4) The number in parenthesis indicates the number of physical railway links between two countries. Source: Economic Research Institute for ASEAN and East Asia. 2010. Final Report: ASEAN Strategic Transport Plan, 2011−2015. Jakarta.

24 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Table 8: Missing Links in the Singapore– line from Yen Vien station in the northern suburbs of Ha Kunming Rail Link Noi to Lao Cai on the Vietnamese border with the PRC. Length Country Missing Links (kilometer) Target Railway development in the GMS is only at the early stages. Cambodia Poipet–Sisophon 48 2013 The GMS Transport Sector Strategy Study (TSSS) in 2005 Phnom–Loc Ninh 255 2015 recommended the inclusion of railway and other modes of transport as part of the GMS connectivity strategy. The Lao PDR Vientiane–Thakek–Mu Gia 466 2020 TSSS noted that the SKRL has been the only regional Myanmar Thanbyuzayat–Three Pagoda 111 2020 railway plan thus far, although the study also noted that Pass the GMS countries—in particular, the PRC, Myanmar, Thailand Aranyaprathet–Kiongkuk 6 2014 Thailand, and Viet Nam—have been actively investing Three Pagoda Pass–Noam Tok 153 2020 in the modernization of their respective national railway Viet Nam Loc Ninh–Ho Chi Minh 129 2020 systems. For instance, the PRC is investing in high speed Mu Gia–Tan Ap–Vung Ang 119 2020 rail, while Thailand and Viet Nam are also considering such Lao PDR = Lao People’s Democratic Republic. investments. Source: ASEAN Secretariat. 2010. ASEAN Strategic Transport Plan, 2011– 2015. Jakarta. The 3rd GMS Summit in 2008 agreed to look into the possibility of expanding transport connectivity in the GMS through other modes, which eventually paved the way aims to construct missing sections and links to complete for the conduct of the Connecting GMS Railways Study the network. A number of feasibility studies have been that was completed in 2010. Among others, the railway completed and some routes that build up the rail network, study identified four alternative railway routes, beyond the including certain sections, are undergoing construction and SKRL, that would connect ASEAN (Box 5). The technical rehabilitation. The missing SKRL links are found in the and feasibility studies for these alternative routes would connections between Thailand and Cambodia, Thailand need to be conducted before investment decisions could and Myanmar, and Cambodia and Viet Nam (Table 8). be made.

Rail connectivity in the GMS. Among the missing links The GMS railway strategy, entitled Connecting Greater listed in the MPAC, the Poipet-to-Sisophon section in Mekong Subregion Railways: A Strategic Framework and Cambodia is included in the GMS VPOA as a part of issued in August 2010 highlighted the need to address the the full project on the Rehabilitation of the Railway in software components apart from constructing the routes. Cambodia. This project will rehabilitate 594 kilometers Among others, these include (i) agreeing on common (km) of railway track and associated structures; reconstruct technical standards of interoperability; (ii) developing the 48 km of the destroyed railway line to Thailand; construct rolling stock; (iii) signaling, telecommunications, and direct railway access to the container terminal in the port train control systems; (iv) rules and procedures for safety; of Sihanoukville; and restructure the railway sector in (v) addressing operational, organizational, and institutional Cambodia, by transferring the operation and maintenance issues; and (vi) ensuring connection to other modes of of the rehabilitated railway to a private commercial railway transport. Streamlining and harmonizing procedures for operating company. By reconstructing the destroyed the movement of goods and peoples will also be needed. railway to the Thailand border from Poipet, the project will Developing the institutional structure and mechanism to provide one of the important missing links of the SKRL. support the network will be crucial. The GMS has taken the initial steps to establish a GMS Railway Association that Apart from the construction of the SKRL missing segment would be modeled after the International Railway Union. from Poiphet to Sisophon, which is funded by a loan provided by ADB as part of the Railway Rehabilitation GMS railways strategy and ASEAN rail connectivity. Project in Cambodia, the GMS VPOA includes a number The GMS railways strategy will support rail connectivity of important sections for upgrading and expansion in the in ASEAN in two ways: first, by expanding the railway national railway systems. These include the (i) Nanning– network beyond SKRL; and second, by taking measures Kunming section, (ii) Thanaleng–Nong Khai railway to to address the software components that are essential Vientiane, and (iii) Dali–Ruili railway line running from for interoperability in cross-border rail links, safety, and central to southwestern Yunnan Province. Another GMS connectivity with other modes. The technical assistance railway project is the Yen Vien–Lao Cai Railway Project, requirements of these software components have been along the Ha Noi–Haiphong Corridor in the eastern identified and the institutional mechanism to coordinate corridor. This project will rehabilitate 285 km of railway these is under consideration. Considering capacity and

strategy and program links 25 Box 5: Alternative Railway Routes in the Greater Mekong Subregion

The strategic framework for the Greater Mekong Subregion (GMS) railways, which was conducted in 2010, specified the elements for railway development in the subregion, including the identification of possible railway routes. The framework went beyond the Singapore−Kunming Rail Link (SKRL), the only railway plan that seeks to connect ASEAN, to consider four alternative routes in the GMS:

Route 1: Bangkok–Phnom Penh–Ho Chi Minh City–Ha Noi–Kunming and Nanning Route 2: Bangkok–Vientiane–Kunming (via Boten–Mohan)–Nanning and Ha Noi–Ho Chi Minh City Route 3: Bangkok–Vientiane–Ha Noi and Ho Chi Minh City (via Thakhek–Mu Gia–Vung Ang)–Kunming and Nanning (via Ha Noi) Route 4: Bangkok–Kunming (via Chiang Rai–Boten–Mohan)–Nanning and Ha Noi–Ho Chi Minh City

Routes 1 and 3 were identified because the routes were defined in the Vientiane Plan of Action, 2004–2010 as priority routes in the SKRL. Routes 2 and 4 were also identified because these routes have often been considered as other potential SKRL routes. Detailed studies will have to be further conducted to determine the operating parameters and the financial and economic viability of these routes.

Source: ADB. 2010. Connecting Greater Mekong Subregion Railways: A Strategic Framework. Manila.

resource constraints, especially in Cambodia, the Lao PDR, The goal set by the ASEAN Strategic Transport Plan (ASTP), Myanmar, and Viet Nam, special effort and assistance will 2011–2015 for maritime transport is the establishment of be required from ASEAN, its dialogue partners, and other an integrated, competitive, and seamless maritime transport international organizations to complete the SKRL. The Lao network, while addressing concerns on maritime safety and PDR, which has the maximum length of new construction, security and environment- and user-friendly ports. Table 9 will especially need resources to accomplish its spur line. lists the basic goals and strategies for the ASEAN maritime transport sector in 2011–2015. On shipping services, the Rail connectivity in IMT-GT. It is difficult to ascertain key initiatives include (i) promotion of market integration what has been achieved and what remains to be undertaken and liberalization through the principle of open access in IMT-GT because of the lack of detailed information. of the ASEAN Member States to international maritime Clearly, some improvements are taking place on the trade, (ii) development of a strategy for the ASEAN Single southern Thailand–northern Malaysia Railway link, as Shipping Market, (iii) harmonization of ship registration well as in Sumatra, and these should be continued. The practice, and (iv) development of guidelines for the structure IMT-GT Implementation Blueprint, 2012–2016 railway of port tariffs in the ASEAN network ports. As regards port projects include (i) double tracking and electrification on infrastructure, ongoing initiatives include (i) expansion of the rail link between Chumphon in Thailand and Ipoh port capacities and services, (ii) development of guidelines in Malaysia; and (ii) completion of planning studies and for assessing port operations and performance, and design of rail links in Sumatra, followed by implementation (iii) ensuring that all ports meet performance standards. of construction programs. ASEAN Port System. Initially reflected in the ASEAN Maritime Transport Transport Cooperation Framework Plan in 1999, the ASEAN cooperation in maritime transport. Maritime ASEAN-wide Port System currently consists of 47 transport plays an important role in ASEAN connectivity designated ports (Table 10). Among these 47 designated because of the geographically dispersed locations of ports, Singapore Port is the largest, handling about member countries. The sector consists of port infrastructure 500 million tons; followed by Port Klang (Malaysia), with and shipping services. ASEAN cooperation in maritime 152 million tons; and Tanjung Priok (Indonesia), with transport is guided by the Roadmap Towards an Integrated 69 million tons (footnote 15). As observed in the study and Competitive Maritime Transport in ASEAN, which was conducted by the Economic Research Institute for ASEAN adopted at the 13th ASEAN Transport Ministers Meeting and East Asia on the ASTP, some of the designated ports are in 2008. The roadmap focuses on (i) strengthening performing an interregional role, as in the case of Singapore, shipping markets and services, and (ii) ensuring that all Port Klang, Laem Chabang, and Tanjung Pelepas. Coming ASEAN network ports meet acceptable performance and closely to such role are the ports of Manila and Tanjung capacity levels.

26 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Table 9: ASEAN Maritime Transport Cooperation Goals and Strategies for 2011–2015

Goals Strategies Accomplish an integrated, efficient, and competitive maritime • Formulation of the basic strategy and implementing guidelines for transport system the ASEAN Single Shipping Market • Enhancement of the capacity of 47 designated ports included in the ASEAN Port Network • Development of a master plan and feasibility studies for ASEAN Roll-on/Roll-off network as a vital step to enhance the connectivity of archipelagic ASEAN Develop safety navigation system and establish advanced maritime • Review ASEAN Near Coastal Voyage limits as required by the security system in line with international standards International Convention on Standards of Training, Certification and Watchkeeping for Seafarers • Enhance Search and Rescue (SAR) capacity and capability through combined air and maritime SAR Exercises • Develop human resources to strengthen port and shipping operations, including the introduction of advanced technologies for navigation safety, maritime security, and environment preservation Accomplish eco-port and environmental-friendly shipping • Enhance compliance with international standards by promoting implementation of relevant International Maritime Organization conventions ASEAN = Association of Southeast Asian Nations. Source: ASEAN Secretariat. 2010. ASEAN Strategic Transport Plan, 2011−2015. Jakarta.

Table 10: Designated Ports in the ASEAN Transport Network

Member States No. Name of Port Brunei Darussalam 1 Muara Cambodia 2 Phnom Penh, Sihanoukville Indonesia 14 Balikpapan, Banjarmasin, Belawan, Bitung, Dumai, Jayapura, Makassar, Palembang, Panjang, Pontianak, Sorong, Tanjung Emas, Tanjung Perak, Tanjung Priok Malaysia 10 Bintulu, Johore, Kemaman, Kota Kinabalu, Kuantan, Kuching, Port Klang, Penang, Sandakan, Tanjung Pelepas Myanmar 3 Kyaukphyu, Thilawa, Yangon Philippines 9 Batangas, Cagayan de Oro, Cebu, Davao, General Santos, Iloilo, Manila, Subic Bay, Zamboanga Singapore 1 Singapore Thailand 3 Bangkok, Laem Chabang, Songkhla Viet Nam 4 Cai Lan, Da Nang, Hai Phong, Ho Chi Minh ASEAN = Association of Southeast Asian Nations. Source: Economic Research Institute for ASEAN and East Asia. 2010. Final Report: ASEAN Strategic Transport Plan, 2011–2015. Jakarta.

Priok, while there are other major ports actively handling Out of the 47 designated ports, 28 are located in the intra-ASEAN traffic. These roles can shift depending on the subregions—16 in BIMP-EAGA, 7 in IMT-GT, and 5 growth of trade carried in containers, shipping patterns, the in the GMS (Table 11). Many of these ports are located bargaining power of the major port users and port service in the subregional corridors and are included in the providers, as well as competition in the region. With the implementation blueprints of the two subprograms, exception of ports in Malaysia and Singapore, most other indicating their priority status for development. Although ports in the network are relatively poorly developed and many of these ports are small and have low volumes of cargo need to be upgraded. On the other hand, most of the throughput, enhancement of their capacities would help gateway ports in the network are relatively full and require increase trade and further develop the economic potential expansion to accommodate increased trade.17 of the subregions. The BIMP-EAGA and IMT-GT subregional programs therefore play an important role in contributing to the overall ASEAN maritime connectivity

17 ASEAN Secretariat. 2010. Master Plan on ASEAN Connectivity. Jakarta. and the efficient functioning of the ASEAN Port System.

strategy and program links 27 Table 11: ASEAN-Designated Ports In the case of the GMS, a few ASEAN-designated ports are Located in the BIMP-EAGA, important gateway ports in the EWEC, NSEC, and SEC. IMT-GT, and GMS Subregional Programs Maritime connectivity in BIMP-EAGA corridors. In Member Country Name of Port/Province Program BIMP-EAGA, maritime connectivity in the Greater Sulu Brunei Darussalam Muara BIMP-EAGA Sulawesi Corridor (GSSC), which covers North Sulawesi (Indonesia), Sabah (Malaysia), and Mindanao and Palawan Cambodia Phnom Penh GMS (the Philippines), remains weak, and port development Indonesia Belawan/Medan, North IMT-GT has proceeded at a slow pace due to limited volumes of Sumatra trade. Transport connectivity in GSSC consists of port- Dumai/Riau, Sumatra IMT-GT to-port trade flows and shipping services within the Sulu Palembang/South Sumatra IMT-GT Sulawesi Sea. Although the corridor has strong historical Panjang/West Sumatra IMT-GT trade links generally concentrated between North Sulawesi Pontianak/West Kalimantan BIMP-EAGA and Mindanao, and between Sabah and Mindanao, trade Makassar/South Sulawesi BIMP-EAGA remains limited, and there are few shipping services in the subcorridors. The imbalance between exports and imports Balikpapan/East Kalimantan BIMP-EAGA also suggests relatively high freight rates. The GSSC Banjarmasin/South BIMP-EAGA designated ports have very small cargo throughput and Kalimantan shipping services are presently very limited. Bitung/North Sulawesi BIMP-EAGA Jayapura/Papua Province BIMP-EAGA Connectivity along the West Borneo Economic Corridor Sorong/West Papua BIMP-EAGA (WBEC), which is predominantly a land-based corridor, Malaysia Port Klang/Selangor IMT-GT is less sensitive to the development of port infrastructure. WBEC is considered the oil and gas corridor of EAGA Penang/Penang IMT-GT with a fairly established transport infrastructure. RoRo Bintulu/Sarawak BIMP-EAGA ferry services between Brunei Darussalam and Sabah also Kuching/Sarawak BIMP-EAGA allow container trucks and buses to travel smoothly from Sandakan/Sabah BIMP-EAGA Pontianak to Kota Kinabalu, or anywhere else in Sabah Kota Kinabalu/Sabah BIMP-EAGA passing through a limited number of border-crossing Philippines Cagayan de Oro/Cagayan BIMP-EAGA controls. The two major ports—Pontianak in Indonesia de Oro and Kota Kinabalu in Malaysia—are the gateway ports to Davao/Davao BIMP-EAGA regional and international markets. General Santos/South BIMP-EAGA Cotabato Memorandum of Understanding on Sea Linkages. In 2007, the BIMP-EAGA member countries signed the Zamboanga/Zamboanga BIMP-EAGA Memorandum of Understanding (MOU) on Establishing Thailand Songkhla/Songkhla IMT-GT and Promoting Efficient and Integrated Sea Linkages (also Bangkok GMS referred to as the MOU on Sea Linkages) that allowed better Viet Nam Da Nang GMS integration of sea linkages within the subregion. Under the Ho Chi Minh GMS MOU, the member countries are committed to facilitate Hai Phong GMS and promote efficient sea linkages; continuously upgrade port facilities and services, especially in cargo handling ASEAN = Association of Southeast Asian Nations, BIMP-EAGA = Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area, capability; and undertake joint measures to promote the CIMT = Centre for IMT-GT Subregional Cooperation, FC = Facilitation Centre, sustainability of shipping services for designated priority GMS = Greater Mekong Subregion, IMT-GT = Indonesia–Malaysia–Thailand and pioneer routes. There are 19 gateway ports and 8 Growth Triangle. Sources: Compiled from BIMP-FC. 2012. BIMP-EAGA Implementation priority and pioneer routes designated for expansion. Blueprint 2012–2106. Kota kinabalu; CIMP. 2012. IMT-GT Implementation Notwithstanding progress in the expansion of sea linkages Blueprint 2012–2016. Putrajaya; and Economic Research Institute for made possible through the MOU, a number of important ASEAN and East Asia. 2010. Final Report: ASEAN Strategic Transport Plan, 2011–2015. Jakarta. routes remain weak and require further strengthening of connectivity measures. Some routes remain unviable due to low load factors and need additional support from the government (e.g., port tariffs incentives). The private sector has also raised the need to relax the cabotage policy, which requires cargo to go through the capitals before they are

28 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt shipped to foreign destinations, and thus raising shipping port development strategy in the subregion.19 Under the costs. The BIMP-EAGA member countries have agreed to IMT-GT Implementation Blueprint, 2012−2016, a number conduct an assessment of the MOU in 2013 to identify of important port infrastructure improvements have been possible improvements in its implementation. lined up to promote more efficient handling of traded goods. Attention is also given to RoRo services, especially Memorandum of Understanding on the Utilization of across the Straits of Malacca and in ports in Sumatra and Nonconventional Sized Ships. Within the BIMP-EAGA southern Thailand. The study further observed, however, area, a significant amount of informal trade is conducted that the potential for passenger RoRo services across the through small traditional, wooden-hulled vessels called Straits of Malacca will remain limited unless changes kumpits that are classified as nonconventional sized ships in passenger car access arrangements between Malaysia (NCSSs).18 These vessels, below 500 gross tonnage, and Sumatra are made. This challenge will have to be are largely unregulated and are not governed by any addressed to better realize maritime connectivity with arrangements with respect to safety and environmental Sumatra. Moreover, much of the bilateral maritime trade in standards. Under the MOU on Sea Linkages, there is IMT-GT is being handled by NCSSs, and often integrated a provision for countries to exchange information on within localized cross-border trading arrangements. Since the principles and best practices in the operation of maritime in IMT-GT is rather small, it has been suggested these vessels. The purpose is to develop and formalize a that the focus should be on external connectivity (i.e., mechanism that would enable mutual recognition and focusing on markets outside the subregion). monitoring of safety standards, security arrangements, and ship manning. An MOU on the Utilization of NCSS would The routes covered by the five IMT-GT priority economic provide maritime agencies with guidelines governing the corridors combine connectivity by land and sea, taking operation and safety standards of these vessels. The MOU into account geographic and economic factors. The land has been drafted and is currently under consideration by the corridors are basically intended to improve cross-border BIMP-EAGA countries. These mechanisms, once infrastructure and transport services connections between formalized and established, would enhance value chain northern Malaysia and southern Thailand. The land facilitation in hub and feeder port systems in the subregion. corridors also aim at connectivity from south to north across Sumatra, while the maritime corridors are intended Roll-on/roll-off ferry services.The development of to enhance Sumatra’s links with Malaysia and Thailand. The RoRo shipping and port services in selected EAGA land and maritime links are supplemented by air services, ports has been recognized as an important component as well as cross-border transport facilitation measures, to in promoting maritime connectivity. The conduct of a facilitate the movement of goods and people across the study of the RoRo network in BIMP-EAGA, with the subregion. This complex combination of land, sea, and air potential for forming part of an ASEAN RoRo network, connectivity requires well-functioning multimodal logistics has been identified as one of the 12 priority projects in the services, which have yet to be implemented. Master Plan on ASEAN Connectivity. This is linked to BIMP-EAGA’s larger plans to develop a regional nautical The IMT-GT Logistics Development Study conducted highway via the expansion of ferry networks at priority in 2008 identified a wide scope for cooperation in ports (Glan–Tahuna, Zamboanga–Bongao, Bongao– logistics.20 The study highlighted the need to address the Sandakan). RoRo ferry services are also being expanded logistics integration of Sumatra with the relatively well- between Brunei Darussalam and Sabah. With this new “sea developed logistics system of southern Thailand and bridge,” container trucks and buses would be able to travel northern Malaysia.21 Connectivity within Sumatra will smoothly from Pontianak to Kota Kinabalu or anywhere be an important component of the logistics system, as else in Sabah passing through a limited number of border- well as further expansion and liberalization of transport crossing controls. rules (e.g., bilateral exchange of traffic rights) between Malaysia and Thailand. Moreover, improvements in Maritime connectivity in the IMT-GT economic corridors. Cooperation in maritime transport in 19 IMT-GT is focused primarily on the development of port ADB. 2008. IMT-GT Maritime Sector Study. Unpublished. 20 infrastructure. However, the IMT-GT Maritime Sector ADB. 2008. Logistics Development Study of IMT-GT. Unpublished. 21 The study indicated, however, that transport rules and regulations between Study conducted in 2008 observed that there is no explicit Malaysia and Thailand should be relaxed to promote efficient cross-border logistics and transportation. This can be carried out by abolishing transportation quotas between Malaysia and Thailand, particularly on perishable goods, and eliminating required upload and download practices at the cross-border areas, through mutual recognition of road vehicle registration, transport operating license, vehicle 18 NCSSs are defined as ships less than 500 gross tonnage and 24 meters in length. inspection certificates, and vehicle insurance across the border.

strategy and program links 29 cross-border procedures through the simplification and BIMP-EAGA’s plans to develop a RoRo network within harmonization of customs, immigration, and quarantine the subregion will complement plans for an ASEAN RoRo (CIQ) regulations and procedures are being addressed by network. This is linked to BIMP-EAGA’s larger plans to the recently established Task Force on CIQ.22 develop a regional nautical highway via the expansion of ferry networks at priority ports. The possibility of Port infrastructure in the GMS. The importance of coordinating these efforts with IMT-GT should likewise maritime transport in the GMS is linked primarily with be considered, taking into account the benefits that could the development of gateway ports as part of the economic possibly accrue to IMT-GT maritime corridors from these corridors, such as the upgrading of Danang Port along the connectivity measures. coast of Viet Nam at the eastern tip of the EWEC. More recently, with rapid economic growth and transformation There are important constraints to maritime connectivity underway in South Asia,23 Dawei in Myanmar was formally that are best addressed at the level of subregional programs. included as part of the SEC, and the development of the deep For instance, many maritime routes in the subregion sea port at Dawei has been initiated. Projects involving water remain unviable because of low load factors, although the transport in the GMS focus mainly on inland waterways. routes are important for connecting to underserved areas. Measures to sustain these important but unviable routes Role of the subregional programs in ASEAN maritime would be needed. An important step would be the issuance connectivity. As cargo throughput in ASEAN ports of implementation guidelines for the MOU on Sea increases, more efficient shipping and cargo handling Linkages.24 The private sector’s concerns on the cabotage services, and transport and logistics capacities are required. policy would also need to be addressed. With most of the 47 ASEAN-designated ports located in the subregions, current initiatives in ports infrastructure Air Transport and maritime services development constitute essential building blocks. The initiatives seek to achieve ASEAN’s ASEAN cooperation in air transport. Air connectivity in long-term goal of establishing an efficiently functioning ASEAN has increasingly grown in importance as ASEAN port system and an ASEAN Single Shipping Market. moved toward integrating its economies within the The BIMP-EAGA’s MOU on Sea Linkages is helping to region and with the rest of the world. Air transport has further strengthen the port networks within the subregion, two key elements: airport infrastructure and air transport through the designation of additional gateway ports and services. Airports in most ASEAN capitals are considered priority and pioneer routes that would be eligible for port to have adequate capacities in terms of runway lengths to tariff incentives. accommodate existing aircraft operations; however, some still need improvement in airport facilities and services. BIMP-EAGA’s plans to have an MOU to regulate the Some capital airports have expanded their facilities recently operation and safety of NCSSs represent an important to accommodate low cost carriers (LCCs), which have initiative in addressing unique problems in the subregion’s emerged as an important player in the aviation industry. trading environment. BIMP-EAGA’s supply chain in On air transport services, ASEAN continues to make the maritime sector is still predominantly informal and progress in the liberalization of the sector with the view to utilizes traditional vessels (kumpits) to a large extent. This encouraging growth in airline capacity and expansion in unique profile of BIMP-EAGA’s trading environment connectivity. has made it necessary to put in place equivalent supply chain security and facilitation measures to mainstream The ASEAN Roadmap for Integration of Air Travel BIMP-EAGA’s informal trade sector. Given that such Sector (RIATS) signed in 2004 provides the strategy and vessels also operate in the IMT-GT subregion, and in the approach for the liberalization of air services for passengers absence of a similar initiative in the IMT-GT Program, the and freight. The roadmap includes measures specific to the possibility of expanding the coverage of the BIMP-EAGA liberalization of air freight services and scheduled passenger MOU to IMT-GT’s maritime corridors (basically in the services in a staged and progressive basis. Implementation Straits of Malacca) could be explored as a possible joint of the roadmap can proceed on a bilateral, plurilateral, initiative of the two subprograms. multilateral, or subregional basis in line with the ASEAN-X Formula.

22 Approved by the 16th IMT-GT Senior Officials Meeting/Ministerial Meeting held in Melaka on 13–15 October 2009. 23 The decision to include Dawei as part of the SEC was made at the 17th GMS 24 These initiatives are included in the BIMP-EAGA Implementation Blueprint, Ministerial Conference in August 2011. 2012–2016.

30 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Significant progress has been achieved under the RIATS: conclude the ASAM, with ASEAN-wide implementation occurring during a 2-year period between January 2014 (i) For air freight services, the ASEAN Member States have and December 2015. committed to full liberalization of, and accord 3rd, 4th, and 5th freedom rights to, international freight An important step in achieving the ASAM is for all services among any point with international airports ASEAN Member States to complete the ratification within ASEAN. The ASEAN Multilateral Agreement process and implement the already-concluded agreements on the Full Liberalization of Air Freight Services to implement the ASEAN Open Sky Policy through the (MAFLAFS) and its two protocols were concluded in MAAS, MAFLAFS, and MAFLPAS, and their respective May 2009. Among the ASEAN Member States, seven protocols.26 Individual member states would also need to had ratified the agreement as of 2010.25 Liberalization put their aviation policies and infrastructure in place so that of other air transport ancillary services is also being these can be developed to create opportunities for growth. progressively pursued through consecutive rounds of For one, the relaxation of restrictions on ownership, and negotiations, under the 6th package of commitments the gradual breakdown of protective practices surrounding concluded in 2009 within the ASEAN Framework state-owned or flagship airlines, would be needed to Agreement on Services (AFAS). generate opportunities for fair competition, efficiency, and (ii) For air passenger services, the ASEAN Multilateral innovation in the airline industry. Agreement on Air Services (MAAS) with its six protocols, signed in May 2009, provided for unlimited Air transport liberalization in BIMP-EAGA. In 2007, 3rd, 4th, and 5th freedom traffic rights for scheduled BIMP-EAGA signed an MOU on the Expansion of Air passenger services. The flight routes are from and to any Linkages—2 years ahead of the MAAS which was signed points with international airports within and between in 2009. The MOU lifted the limitations on 3rd, 4th, the subregions of ASEAN, and between the capital and 5th freedom traffic rights in designated points in the cities of the ASEAN Member States. The agreement subregion.27 The MOU called for a pragmatic approach has entered into force among the seven ASEAN for the accelerated development of air linkages between Member States that had ratified the agreement as of and among the designated points. Cooperation in the 2010 (footnote 25). Expansion of similar traffic rights development of these designated points would be in the for services between other ASEAN cities are covered form of harmonization of rules and regulations to facilitate under the ASEAN Multilateral Agreement on the Full the movement of passengers, mail, and cargo; exchange Liberalization of Passenger Air Services (MAFLPAS) of information to strengthen the aviation database; and signed in 2010. The implications of these agreements implementation of collaborative programs and projects. in relation to the three subregional programs are This initiative was a significant building block toward the discussed further below. ASEAN-wide goal of air services liberalization.

Under the ASEAN Strategic Transport Plan (ASTP), 2011– To encourage smaller airlines and LCCs to ply the designated 2015, the liberalization of air transport services has moved points, the BIMP-EAGA governments provided incentives to the next level with the articulation of the long-term goal in the form of landing fee waivers, free or discounted to develop an ASEAN Single Aviation Market (ASAM) parking, and reduction of passenger service charges. The by 2015. The ASAM would include a comprehensive airlines’ response to these reforms has been encouraging. set of measures for air transport liberalization, including Air links expanded significantly, and a number of point-to- privatization. The measures will also address growing point connections within the subregion are actively being global concerns about aviation safety and security and considered. Most recent flights have added links but only environmental safeguards consistent with internationally from the capitals to specific points in BIMP-EAGA (e.g., accepted standards. Work is in progress for the development Jakarta–Kota Kinabalu, Manila–Kota Kinabalu), and not of a roadmap for the establishment of ASAM that would between points within the subregion. These developments contain a comprehensive set of measures encompassing created new opportunities and contributed significantly to all issues relevant to the effective operation of a regional the strong growth of the region’s air transport industry in civil aviation market, including appropriate institutional arrangements (Box 6). The AEC Blueprint’s timeline for the establishment and implementation of the ASAM is as early 26 The target year for the ratification of some protocols to these agreements is 2008, some as January 2012 for the ASEAN Member States ready to are in 2010. In a number of cases, the deadlines have not been met. 27 The airports are (i) Brunei Darussalam: Bandar Seri Begawan; (ii) Indonesia: Balikpapan, Manado, Pontianak, and Tarakan; (iii) Malaysia: Kota Kinabalu, 25 The ASEAN Member States that have ratified the agreement are Brunei Darussalam, Kuching, Labuan, and Miri; and (iv) the Philippines: Davao, General Santos, Puerto Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Viet Nam. Princesa, and Zamboanga.

strategy and program links 31 Box 6: ASEAN Single Aviation Market

The Final Report on Developing ASEAN’s Single Aviation Market and Regional Air Services Arrangements with Dialogue Partners was commissioned in 2008 under the Association of Southeast Asian Nations (ASEAN)−Australia Development Cooperation Program. The report proposed key elements of the ASEAN Single Aviation Market (ASAM), including a phased implementation plan, policy implications, and assessment of impact. The report defined ASAM as having the following features:

• All restrictions are removed for designated ASEAN carriers on the operation of passenger and freight transport and associated commercial activities within the Member States of the ASEAN region. • A common policy is adopted for user charges, tariffs, competitive behavior, and other forms of regulation. • Majority ownership and effective control of designated carriers are vested in the ASEAN Member States and/or nationals in aggregate.

The key elements of ASAM include (i) airline ownership and control; (ii) market access; (iii) commercial opportunities, tariffs, and user charges; (iv) market regulation; (v) environmental and social safeguards; and (vi) harmonization of safety and technical regulations. As part of ASAM, the report introduced the concept of an ASEAN Community Carrier that would make it possible for carriers to be majority-owned and effectively controlled by ASEAN nationals in aggregate. It also advocated for greater market access by going beyond the 5th Freedom of Air, which is already widely used.

Source: ASEAN-Australia Development Cooperation Program. 2008. Final Report on Developing ASEAN’s Single Aviation Market and Regional Air Services Arrangements with Dialogue Partners. Jakarta (REPSF II, Project No. 07/003).

recent years, especially through the rapid growth of LCCs. to reduce entry point charges (i.e., landing and take-off Under the BIMP-EAGA Implementation Blueprint, 2012– fees). Malaysia has also agreed to waive landing and parking 1016, plans to further improve the MOU on the Expansion charges for existing and new airlines operating within the in Air Services links will benefit from an assessment study IMT-GT subregion, although the waiver or reduction of to be conducted in 2013.28 A protocol to amend the charges for airline flying new routes is on a reciprocal basis. MOU on air linkages is also being considered to include The impressive growth in LCC activities greatly improved additional points outside BIMP-EAGA under the original accessibility and coverage in much of the subregion. In co-terminalization scheme, and allow airlines to embark addition, cooperation with other ASEAN airlines on the on more flexible routing and scheduling. Another project 3rd, 4th, and 5th freedom rights and among IMT-GT included in the implementation blueprint is the study on airlines, through co-terminalization and other cooperative the rationalization and design of airport incentives applied commercial arrangements, are being promoted. to BIMP-EAGA designated points. The study will assess whether existing linkages can be sustained with the entry A number of air links have been identified for further of LCCs, such as Cebu Pacific, Air Asia, MAS Wings, and improvement, notably in southern Thailand where there Wings Air. These LCCs operate at an advantage over larger are high-volume tourism routes. These include connectivity national carriers on account of their smaller passenger load in and out of Hat Yai and Phuket, as well as between Hat requirements and lower costs per passenger. Yai and Penang, and Hat Yai and Kuala Lumpur. The LCC Firefly has been operating in the Kuala Lumpur–Hat Yai Air transport liberalization in IMT-GT. The development route, and will also open an additional route flying directly of air services in IMT-GT has been largely due to private from Medan (Sumatra) to Ipoh (Perak).29 The Ipoh–Medan sector’s response to more liberal policies on charter services; direct flight is in response to the IMT-GT leaders’ directive and reduced entry point charges, especially in underserved to further enhance air connectivity with Sumatra. areas. Many cities in Malaysia and Thailand are currently interconnected by air through the services of new LCCs Air transport liberalization in CLMV and the GMS. Air that have been given incentives by the two governments. transport cooperation among Cambodia, the Lao PDR, For instance, Thailand has waived 50% of the airport Myanmar, and Viet Nam (CLMV) started much earlier charges for airlines flying within the IMT-GT subregion, than in BIMP-EAGA and IMT-GT. The Agreement on

28 The study will also cover the MOUs on land transport (buses and coaches) and sea 29 The Ipoh–Medan direct flight is included in the IMT-GT Implementation Blueprint, linkages. 2012–2016.

32 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Subregional Cooperation in Air Transport among CLMV The MAAS is much more extensive in coverage— was signed by the heads of aviation authorities in 1998 to containing provisions on customs duties, tariffs, user provide for the lifting of restrictions on 3rd, 4th, and 5th charges, and fair competition that are not covered in the freedom traffic rights to airlines operating at designated BIMP-EAGA MOU on Expansion of Air Linkages and the international airports. The agreement is part of the wider Agreement on Subregional Cooperation in Air Transport ASEAN policy on competitive air transport services. The among CLMV. These include the (i) setting of tariffs at objective is to expand the subregional route networks in reasonable levels, which will not require approval by the CLMV to promote traffic to and from the subregion, thus contracting party; (ii) exemption of designated airline’s further enhancing trade, investment, and tourism. The fuels, equipment, spare parts and supplies from customs agreement also stipulates that there will be no limitation duties, inspection fees, and other national taxes, on a on the number of designated airlines, non-scheduled air reciprocal basis; (iii) imposition of user charges based on the services, route structures, and computer reservation systems. principle of national treatment; and (iv) elimination of all The agreement also covered cooperation in harmonizing forms of discrimination that could inhibit fair competition. rules and regulations, exchange of information, and The MAAS in effect expands the liberalization measures collaborative projects. The Multilateral Agreement on Air applicable to the designated points in the subregional Transport of the Subregion was subsequently signed on MOUs or agreements.31 20 May 2009, providing a comprehensive framework of cooperation among the civil aviation authorities of the four The limited “open skies” policies of BIMP-EAGA, countries, including air transport liberalization. IMT-GT (particularly between Malaysia and Thailand), and CLMV have helped lay the foundation for the ASAM. Under the present GMS Program, the development of The subregional agreements and MOUs that preceded the air transport sector is being pursued in the context the MAAS made possible the introduction of new and of developing multimodal transport systems, which will pioneering routes, and promoted competition to city pair include the requisite liberalization of transport services services. Start up carriers, mostly LCCs, were encouraged sector. Presently, air transport projects listed in the through airport incentives that increased airline capacity, Vientiane Plan of Action (VPOA) consist mainly of airport opened opportunities for airline growth, allowed new improvements and upgrading.30 The liberalization of air market entrants, and encouraged existing operators to be transport in the individual GMS countries is happening more innovative. Airport connectivity was also enhanced as part of the RIATS. An ASEAN−PRC Air Transport by differentiated airport routes; expansion of services from Agreement has also been signed, providing for the airport hubs, as well as the emergence of secondary hubs; removal of restrictions on air services toward achieving full and the establishment of many small and medium-sized liberalization between and beyond ASEAN and the PRC. airports to accommodate the increasing number of LCCs.

Links of ASEAN air agreements with BIMP-EAGA, The important role of subregional groups in promoting IMT-GT, and CLMV. The MAAS signed in 2009 air connectivity was explicitly recognized in the MAAS, essentially provides for the lifting of restrictions of up to which served to consolidate subregional efforts at air the 5th freedom rights between ASEAN cities and between transport liberalization. The MAAS provided the grant of ASEAN subregions. In Protocol 1 of the agreement, the 3rd, 4th, and 5th freedom traffic rights not only within ASEAN subregions refer to the BIMP-EAGA, IMT-GT, subregions but also between subregions, thus deepening Subregional Cooperation in Air Transport, among CLMV, air connectivity within ASEAN. The MAAS expanded and the Indonesia–Malaysia–Singapore–Growth Triangle. the liberalization measures applicable to the designated Protocols 1–6 of the MAAS specify the designated routes points in the subregional MOUs and agreements through to be granted 3rd, 4th, and 5th freedom rights in BIMP- additional provisions on tariffs, customs duties, user EAGA, IMT-GT, and CLMV (Table 12). The MAAS, charges, and fair competition. therefore, provides a direct link to the air transport initiatives of the subregional groupings, and can be viewed BIMP-EAGA is systematically pursuing further expansion as a means to consolidate earlier efforts to liberalize air of the MOU on Expansion of Air Linkages to outside the transportation. subregion. It will also conduct an assessment of the MOU, as well as a study on the rationalization of airport incentives being extended to designated points. Although it does not

30 These projects include, among others, the Savannakhet Airport Improvement, 31 The MAAS contains a provision that in the event of any inconsistency between Nanning International Airport Improvement, and Guilin International Airport a provision of the MAAS and any existing bilateral or multilateral air services Improvement. agreement(s), the less restrictive or more liberal provision shall prevail.

strategy and program links 33 Table 12: ASEAN Multilateral Agreement in Air Services: Designated Points in BIMP- EAGA, IMT-GT, and CLMV under Protocols 1–6 on the 3rd, 4th, and 5th Freedoms of the Air

Subregions Protocol 1 Protocol 2 Protocol 3 Protocol 4 Protocol 5 Protocol 6 Unlimited 3rd Unlimited Unlimited 3rd and 4th Freedom 5th Freedom and 4th Freedom Unlimited 5th Unlimited 3rd and Unlimited 5th Traffic Rights Traffic Rights Traffic Rights Freedom Traffic 4th Freedom Traffic Freedom Traffic Between the Between Within the ASEAN Rights Within the Rights Between the Rights Between the ASEAN Capital the ASEAN Subregion ASEAN Subregion ASEAN Subregions ASEAN Subregions Cities Capital Cities Brunei Darussalam−Indonesia−Malaysia−Philippines East ASEAN Growth Area (BIMP-EAGA) Brunei Bandar Seri Bandar Seri Bandar Seri Bandar Seri Bandar Seri Bandar Seri Darussalam Begawan Begawan Begawan Begawan Begawan Begawan Indonesia Balikpapan, Balikpapan, Balikpapan and Balikpapan and Jakarta Jakarta Manado, Manado, Manado Manado Pontianak, and Pontianak, and Tarakan Tarakan Malaysia Kota Kinabalu, Kota Kinabalu, Labuan and Miri Labuan and Miri Kuala Lumpur Kuala Lumpur Labuan, Kuching, Labuan, Kuching, and Miri and Miri Philippines Davao, General Davao, General Davao, General Davao and Manila Manila Santos, Puerto Santos, Puerto Santos, Puerto Zamboanga Princesa, and Princesa, and Princesa, and Zamboanga Zamboanga Zamboanga Cambodia, the Lao People’s Democratic Republic (Lao PDR), Myanmar, Viet Nam (CLMV) Cambodia Phnom Penh Phnom Penh Phnom Penh Phnom Penh Phnom Penh Phnom Penh Lao PDR Luang Phabang, Luang Phabang, Luang Phabang, Luang Phabang, Vientiane Vientiane Pakse, and Pakse, and Pakse, and Vientiane Pakse, and Vientiane Vientiane Vientiane Myanmar Mandalay and Mandalay and Mandalay and Mandalay and Yangon Yangon Yangon Yangon Yangon Yangon Viet Nam Cat Bi, Chi Minh Cat Bi, Da Nang, Cat Bi, Da Nang, Cat Bi, Da Nang, Ha Noi Ha Noi City, Da Nang, Dien Bien Phu, Dien Bien Phu, Dien Bien Phu, Dien Bien Phu, Ha Noi, Ho Chi Ha Noi, Ho Chi Minh Ha Noi, Lien Ha Noi, Ho Chi Minh City, Lien City, Lien Khuon, and Khuon, and Minh City, Lien Khuon, and Phu Phu Bai Phu Bai Khuon, and Phu Bai Bai Indonesia−Malaysia−Thailand Growth Triangle (IMT-GT) Indonesia Banda Aceh, Banda Aceh, Medan and Padang Medan and Padang Jakarta Jakarta Medan, Nias, and Medan, Nias, and Padang and Padang Malaysia Alor Star, Ipoh, Alor Setar and Alor Setar and Ipoh Alor Setar and Ipoh Kuala Lumpur Kuala Lumpur Kota Bharu, Ipoh, Kota Bharu, Langkawi, and Langkawi, and Penang Penang Thailand Hat Yai, Nakon Hat Yai, Nakon Hat Yai, Nakon Hat Yai, Nakon Bangkok Bangkok Si Thammarat, Si Thammarat, Si Thammarat, Si Thammarat, Narathiwat, Narathiwat, Narathiwat, Pattani, Narathiwat, Pattani, and Trang Pattani, and Trang and Trang Pattani, and Trang ASEAN = Association of Southeast Asian Nations. Sources: Compiled from Protocols 1–6 of the ASEAN Multilateral Agreement on Air Services.

34 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt have a framework agreement on air transport, IMT-GT annually, which far exceeds the rate of economic growth.33 may also conduct an assessment of its bilateral air linkages Consistent with ASEAN’s objectives, the GMS Energy and the impact of airport incentives on the sustainability Sector Roadmap adopted in 2009 seeks to address the of LCCs. issue of ensuring a reliable supply of energy so as not to constrain future economic growth. The long-term goal As ASEAN moves toward the ASAM, further liberalization is to work toward an integrated regional energy market of air transport will require going beyond 5th freedom aimed at optimizing the subregion’s energy resource base, traffic rights. The subregional groups can start working in exploiting economies of scale, collectively addressing this direction by expanding to 6th freedom rights, which social and environmental concerns that spill beyond are operational for some regional carriers. Moving to national boundaries, and removing policy and institutional 7th, 8th, and 9th freedom rights would be more difficult constraints in the energy trade. given the diverse views of the ASEAN Member States.32 The GMS Energy Sector Roadmap indicates the strategic actions that would be required to achieve the goal of energy Energy Connectivity reliability and security. These include (i) expanding cross- border trade and energy integration beyond the power sector into natural gas and refining; (ii) investing in high- Energy security has emerged as a priority concern for technology solutions by leapfrogging to greater energy ASEAN as a result of the unprecedented increase in efficiency and energy productivity levels, especially for the energy demand brought about by rapid economic growth large number of energy-producing assets to be constructed; in ASEAN economies. To address this concern, ASEAN (iii) pursuing policy regimes and energy reforms essential has taken measures to diversify its energy mix to lessen to move energy systems from state-controlled monopolies dependence on fossil fuels. It has also recognized the need to more market-based energy entities; (iv) considering the to address the emerging competition among member states energy implications of the rapid expansion in the transport for sources of energy supply. Cooperation in the energy sector; (v) reducing dependence on imported petroleum sector is expected to play a significant role in addressing the to reduce the subregion’s vulnerability to supply shocks goal of energy security in the region. and price fluctuations; (vi) promoting access to modern energy sources in the rural areas, which are predominantly ASEAN Cooperation in Energy. ASEAN cooperation in dependent on traditional energy sources like fuel wood energy is guided by the ASEAN Plan of Action on Energy and charcoal; and (vii) pursuing improvements in policy Cooperation (APAEC), 2010–2015, which articulates the regimes and institutional reforms toward a shift to more plans, strategies, and actions toward the goal of having market-based entities, sector liberalization, modernization a reliable and secure supply of energy. Continuing from of monopolistic utilities, and harmonization of technical two previous plans for 1999–2004 and 2004–2009, standards and operating procedures. the overarching goal of APAEC is to establish efficient, transparent, reliable, and flexible energy markets in the Energy Cooperation in BIMP-EAGA. The BIMP-EAGA ASEAN region; and improve access to affordable energy. Roadmap and Action Plan for the Development of the ASEAN’s strategy in achieving these objectives is through Energy Sector in BIMP-EAGA, 2007–2010 (henceforth, grid connectivity for electricity and gas via its two flagship the BIMP-EAGA Energy Sector Roadmap) was prepared programs: the ASEAN Power Grid (APG) and Trans- as part of the exercise to operationalize the BIMP-EAGA ASEAN Gas Pipeline (TAGP). Other key components Roadmap to Development, 2006–2010.34 The roadmap had of the APAEC are coal and clean technology, renewable the objective of making electricity available to all sectors and energy, and energy efficiency. communities, especially to the rural areas, and optimizing the use of domestic energy resources, such as biomass, Energy Cooperation in the GMS. As part of ASEAN, biofuels, solar, wind, and geothermal. As envisaged in rapid economic growth in the GMS has also mirrored the the roadmap, the promotion of innovative, cost-effective overall increase in energy demand. Most GMS countries rural electrification schemes for poverty reduction would forecast growth in energy demand to increase by 7%–16% take advantage of regional grid infrastructure development being pursued under the ASEAN framework. Power

33 ADB. 2009. Building a Sustainable Energy Future: The Greater Mekong Subregion. 32 ASEAN−Australia Development Cooperation Program. 2008. Final Report on Manila. Developing ASEAN’s Single Aviation Market and Regional Air Services Arrangements 34 ADB. 2007. The Roadmap and Action Plan for the Development of the Energy with Dialogue Partners. Jakarta (REPSF II, Project No. 07/003). Sector in BIMP-EAGA, 2007–2010. Unpublished.

strategy and program links 35 interconnections through a regional grid would be essential the action plan. A proposal by the Centre for IMT-GT in improving power reliability and supply, given that Subregional Cooperation (CIMT)36 to create a working the development of the energy sector in BIMP-EAGA group was not acted upon favorably by the Senior Officials territories is generally uneven. Some areas rely on costly Meeting, and a subsequent directive by the 3rd Summit imported fossil fuels and require additional generation indicated that energy and environment should be treated capacity, while other EAGA territories have power surpluses as cross-cutting concerns across the existing working of renewable energy that could be traded across borders. groups. This notwithstanding, the 12 “rationalized” There were explicit references in the roadmap to the need flagship projects37 that resulted from the midterm review to ensure consistency with broader ASEAN initiatives and continued to refer to the transport and energy sectors; in coordinate actions with the relevant ASEAN bodies for this the IMT-GT Implementation Blueprint, 2012–2016, the purpose. Melaka–Pekanbaru was included as a priority project.

However, the official status of the BIMP-EAGA Energy The energy sector strategies of ASEAN, GMS, and Roadmap is not clear. While the roadmap provided a BIMP-EAGA are shown in Table 13. comprehensive analysis of the energy situation in the subregion, and a well-articulated strategy and derived list ASEAN Power Grid. The APG is a flagship program of potential projects, the components of the BIMP-EAGA mandated in 1997 by the ASEAN Heads of States under Roadmap Action Plan on Energy had a much narrower ASEAN Vision 2020 toward ensuring regional energy scope. It focused primarily on the (i) transmission lines security and promoting the efficient utilization and between Sarawak and West Kalimantan, and between sharing of resources. ASEAN electricity networks have Sarawak and Brunei Darussalam;35 and (ii) development been grouped into two systems—the East and West of a common approach to renewable energy and energy systems—for implementing interconnection projects. efficiency. It is significant to note that the roadmap made The East System consists of Sarawak, Sabah (in Malaysia); little reference to the energy sector, and only in the context Brunei Darussalam; West Kalimantan, Indonesia; and the of calling for private sector engagement in economic Philippines. The West System comprises Cambodia; Batam development projects. The Midterm Review and Final and Sumatra in Indonesia; the Lao People’s Democratic Assessment of the Energy Roadmap reported that, except Republic (Lao PDR); Peninsular Malaysia; Myanmar; for the Sarawak–West Kalimantan Transmission Line with Singapore; Thailand; and Viet Nam. The Heads of ASEAN funding assistance provided by ADB, most other initiatives Power Utilities/Authorities (HAPUA), which has been are only at the preparatory or conceptual stage. The focus tasked to implement the APG program, completed the on the Sarawak–West Kalimantan Transmission Line is, in ASEAN Interconnection Master Plan Study (AIMS) in fact, the only project for the energy sector reflected in the March 2003; and later updated in 2010. AIMS II serves BIMP-EAGA Implementation Blueprint, 2012–2016. as the reference guide in the implementation of ASEAN interconnection projects. Energy Cooperation in IMT-GT. Cooperation in the energy sector is not reflected as a priority in IMT-GT, but Currently, the APG consists of 15 identified interconnections it is included in the IMT-GT Roadmap for Development, (Table 14). The strategy is to pursue the interconnections: 2007–2011 and action plan. The roadmap included first, on cross-border bilateral terms, then gradually expand cooperation in energy as a component of the strategy to to subregional basis; and, finally, to a totally integrated strengthen infrastructure linkages. Meanwhile, the action Southeast Asian power grid system. The investment plan indicated the formulation, by 2008, of a program requirement of the APG is estimated at $5.9 billion.38 Of for energy cooperation within the framework of the APG the 15 interconnection projects,39 nine projects are to be and TAPG; however, the program did not materialize. commissioned by 2015, four projects after 2015, and two Other components of the IMT-GT roadmap action plan projects have just been newly proposed. Six interconnection involving alternative and clean sources of energy, and the links are already in operation. Two projects are included promotion of independent power producers in mini-hydro in the GMS investment pipeline, and one project in the plants, were dropped by the time of the midterm review for lack of progress. Part of the reason was the absence of a working group on energy to drive the activities in 36 CIMT is the regional secretariat of the IMT-GT. 37 The IMT-GT midterm review rationalized the 37 flagship programs in the roadmap and reduced it to 12. 38 35 The Energy Working Group noted that the Sarawak–West Kalimantan Transmission ASEAN Secretariat. 2010. ASEAN Plan of Action on Energy, 2010–2015. Jakarta. Line Project is being implemented with ADB assistance, while the Sarawak– 39 There were originally 16 projects but one of them, the Sabah–Brunei Darussalam Brunei Darussalam project would be implemented bilaterally by Malaysia and project, has not been selected to be part of the APG. The East Sabah–East Brunei Darussalam. Kalimantan project is newly proposed.

36 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Table 13: Energy Sector Strategies of ASEAN, GMS, and BIMP–EAGA

Strategiesa Goals or Subsector ASEAN GMS BIMP-EAGA Ensure energy supply security • Develop grid connectivity • Develop grid connectivity • Reduce reserve margins in through the ASEAN Power Grid beyond the power sector into the power sector to optimize (APG) and Trans-ASEAN Gas natural gas investments and increase the Pipeline (TAGP) to optimize the • Integrate the energy market financial efficiency of new region’s energy resources by reducing barriers to cross- power projects border trade in electricity Improvement of policy regimes • Harmonize all aspects of • Establish the policy and • Support power sector and harmonization of regulatory technical standards and regulatory framework for power restructuring, reform, and frameworks operating procedures, as well trade in the GMS operational efficiency as regulatory frameworks • Prepare a time-bound plan to improvement options among member states introduce competition to the power sector Power subsector • Accelerate the development of • Develop grid interconnection • Implement the ASEAN APG interconnection projects infrastructure for cross-border Interconnection Master Plan, • Optimize the generation sector trade in electricity and establish the policy with available indigenous • Optimize use of available framework for the electricity energy resources subregional energy resources networks comprising the APG • Encourage and optimize the sources utilization of ASEAN resources (funding, expertise, and products) to develop the generation, transmission, and distribution sectors Oil and gas subsector • Implement TAGP based on the • Promote the development of • Increase access to energy to all approved pipeline projects identified GMS segments of sectors and communities, even • Implement the Memorandum the TAGP the poorest, in the subregion of Understanding on the TAGP, • Develop other potential through interconnecting involving interconnection segments of the oil and arrangements utilizing APG and issues, gas transit principles, gas sector (e.g., production TAGP tax, and tariff issues distribution, logistics, • Explore additional gas supply facilitation of contractual from both conventional and arrangements for exploration, non-conventional sources and interconnection policy) • Formulate a GMS master plan for natural gas, and other related studies Coal subsector • Strengthen institutional and • Promote energy efficiency and • Develop cleaner fossil fuel policy framework toward the clean coal technologies, and options, including oil, gas, and promotion of a regional policy reduce carbon emissions from coal on coal trade coal plants • Develop environmentally sound • Promote coal and clean coal • Strengthen policy and fossil fuels, including oil, gas, technologies institutional framework to and coal in close association • Promote intra-ASEAN coal enhance GMS trade and with clean production and trade and investment private investments in the coal consumption technologies that subsector can reduce greenhouse gas emissions Continuation on next page

strategy and program links 37 Table 13 continued

Strategiesa Goals or Subsector ASEAN GMS BIMP-EAGA Sustainable energy development, • Increase the development • Develop the utilization of • Increase utilization of including the development of and utilization of renewable indigenous low carbon and renewable energy, including renewable energy energy sources to achieve the renewable resources biomasses, biofuels, solar, 15% target share of renewable • Promote the use of renewable wind, and other available energy in the ASEAN power energy resources, including resources generation mix biomass, biofuel, solar • Strengthen renewable energy (photovoltaic), wind, micro- development, such as biofuels hydro, and other locally • Promote open trade, available energy sources by facilitation, and cooperation on upscaling best practices in the renewable energy and related GMS industries • Promote subregional engineering and manufacturing capacity for renewable energy Access to energy, especially in • Promote access to energy • Promote innovative, cost- • Develop off-grid decentralized remote and rural areas among the “energy poor,” effective rural electrification and/or distributed energy especially in the rural areas schemes for poverty reduction, systems for the integration of where traditional sources of utilizing regional grids isolated areas, particularly for energy (fuelwood and charcoal) • Promote best regional practices renewable energy still dominate of off-grid and decentralized • Develop effective rural energy systems for accelerated electrification schemes development of isolated areas Energy efficiency and • Promote good energy • Improve energy efficiency • Increase energy efficiency conservation management practices, through demand side and conservation at both the especially for industrial and management and energy demand and supply sides commercial sectors conservation, with a view to • Develop energy efficiency reducing energy consumption and conservation tools (e.g., per unit of gross domestic database, technical directory, product generated handbook, benchmarks, etc.) Energy planning, implementation, • Enhance energy policy and • Adopt performance targets to • Strengthen collaboration and and monitoring supply security information properly monitor and reflect the cooperation among national sharing network successes in realizing goals, and regional institutions in • Conduct capacity building in in the countries and in the energy policy and planning, energy and environmental subregion, in various areas of and supply security information planning and supply security the GMS Energy Roadmap sharing network assessment • Enhance information sharing and networking, as well as capacity building activities Private sector participation • Provide opportunities for private • Promote public–private • Promote private sector sector involvement in terms of partnership and private sector participation in sector investment, including financing participation, particularly restructuring and investment and technology transfer in through small and medium- the various subsectors and sized enterprises program components • Enhance institutional and regulatory environment conducive to private sector • Prepare a strategy to market the GMS as an attractive market for energy investments ASEAN = Association of Southeast Asian Nations, BIMP-EAGA = Brunei Darussalam−Indonesia−Malaysia− Philippines East ASEAN Growth Area, GMS = Greater Mekong Subregion. a The IMT-GT program does not have an energy strategy. Sources: ADB. 2007. Roadmap for the Development of the Energy Sector in the BIMP-EAGA Region, 2007−2010. Unpublished; ADB. 2009. Building a Sustainable Energy Future: The Greater Mekong Subregion. Manila; ADB. 2010. Roadmap for Expanded Energy Cooperation in the GMS and Roadmap, 2010–2011. Manila; and ASEAN Secretariat. 2010. ASEAN Plan of Action on Energy Cooperation, 2010–2015. Jakarta.

38 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Table 14: Status of ASEAN Power Grid BIMP-EAGA pipeline. The realization of the APG faces Earliest significant challenges as many of the interconnections Commissioning will require submarine cables or inland connections, No. Interconnection Systems Date especially within CLMV consisting of Cambodia, the Lao 1 Peninsular Malaysia–Singapore (new) 2018 PDR, Myanmar, and Viet Nam. The economic viability 2 Thailand–Peninsular Malaysia of a number of interconnections would still have to be • Sadao–Bukit Keteri Existing established and the required regulatory framework set in place. • Khlong Ngae–Gurun Existing • Sungai Kolok–Rantau Panjang (new) Proposed ASEAN Power Grid and the GMS. The APG • Khlong Ngae–Gurun (additional) 2016 interconnections between the Lao PDR and Thailand 3 Sarawak–Peninsular Malaysia 2015–2021 (Project No. 9) at Mae Moh 3–Nan–Hong Sa and Udon 4 Peninsular Malaysia–Sumatra 2017 Thani 3–Navong are included in the GMS pipeline of investment projects. Other planned GMS interconnection 5 Batam–Singapore 2015–2017 projects include Ban Sok (the Lao PDR)–Pleiku (Viet Nam), 6 Sarawak–West Kalimantan 2015 Stung Treng (Cambodia)–Thay Ning (Viet Nam), and 7 Philippines–Sabah 2020 Ban Sok (the Lao PDR)–Stung Treng (Cambodia). Most 8 Sarawak–Sabah–Brunei Darussalam of the existing and planned interconnections in the • Sarawak–Sabah 2020 GMS, however, are primarily associated with specific • Sabah–Brunei Darussalam Not selected hydro schemes, taking the form of connections into the neighboring power network to deliver power exports from • Sarawak–Brunei Darussalam 2012–2016 these power plants.40 Other than these, the interconnection 9 Thailand–Lao PDR capacity between the GMS countries is currently relatively • Roi Et 2–Nam Theun 2 Existing little.41 Many of the investment projects in the GMS • Sakhon Nakhon 2–Takhek–Theun 2012 Program are export-oriented power generation projects. Hinboun • Mae Moh 3–Nan–Hong Sa 2015 The current GMS strategy in the power subsector • Udon Thani 3–Navong (converted to 2017 continues the development of a regional power market 500 kilovolt) but, over the long-term, also takes the trajectory of • Ubon Ratchatani 3–Pakse–Xe Pian–Xe 2018 developing an integrated and competitive energy market Namnoy in the GMS. The first phase of the development of a GMS • Khon Kaen 4–Loei 2–Xayaburi 2019 regional power market was through the Intergovernmental • Thailand–Lao PDR (new) 2015–2023 Agreement on Power Trade signed in 1992, which formally introduced the concept of an electricity transmission 10 Lao PDR–Viet Nam (new) 2011–2016 grid to interconnect the GMS countries. Subsequently, 11 Thailand–Myanmar 2016–2025 interconnection transmission projects were identified 12 Viet Nam–Cambodia (new) 2016 and the Regional Power Trade Coordinating Committee 13 Lao PDR–Cambodia 2011 (RPTCC) was established to oversee the development of 14 Thailand–Cambodia (new) 2015–2017 the GMS regional power market. The RPTCC identified 15 East Sabah–East Kalimantan Proposed four stages in developing electricity trade: (i) bilateral cross- border connections through power purchase agreements, 16 Singapore–Sumatra 2020 ASEAN = Association of Southeast Asian Nations, Lao PDR = Lao People’s Democratic Republic. Source: Heads of ASEAN Power Utilities/Authorities. 2010. Report to the 40 Among the priority interconnections identified are those (i) from Myanmar to the 28th Senior Officials Meeting on Energy (as cited in the Master Plan on PRC because of the hydro potential in Myanmar and the huge needs of imports ASEAN Connectivity). for the PRC, (ii) from Myanmar to Thailand because of the price gap between the two countries and the important hydro potential in Myanmar, (iii) between the Lao PDR and Thailand because of the huge hydro potential in the Lao PDR and the large price gap between the two countries, (iv) from the Lao PDR to Viet Nam because of the hydro potential in the Lao PDR south (3.5 gigawatt in the south) and the large price gap between the two countries, (v) from the Lao PDR north to Viet Nam north because of the hydro potential in the Lao PDR and the price gap between the two countries, and (vi) from Cambodia to Viet Nam south for the export of Lower Sessan II Hydro Power Project. 41 ADB. 2010. Final Report: Facilitating Regional Power Trading and Environmentally Sustainable Development of Electricity Infrastructure in the GMS. Manila. (TA 6440- REG).

strategy and program links 39 (ii) grid-to-grid power trading between any pair of countries Sabah–Sarawak–West Kalimantan interconnection was using the facilities of a third country, (iii) development also designed specifically for Perusahaan Listrik Negara of transmission links dedicated to cross-border trading, (PLN) in Indonesia to import small amounts of power and (iv) development of multiple buyer–seller regulatory from Sarawak Electricity Supply Corporation (SESCO) frameworks to develop a competitive market for electricity to supply villages at the border in West Kalimantan. to be developed. Additionally, the interconnection project was designed for PLN and SESCO to share peak power and reserve margin. The regional master plan study for the GMS has The TBPG Interconnection Coordination Committee was recommended a review of national and bilateral priority created to oversee the implementation of Borneo Island’s interconnection projects in the context of expanded energy power grid interconnection. connectivity beyond the power sector over the long-term (footnote 41). It was envisaged that interconnection ASEAN Power Grid in IMT-GT. Although energy is projects identified in the master plan study would be paced not a priority sector of cooperation in the subregion, the with the development of the associated export-oriented Melaka–Pekanbaru Power Interconnection Project has generation projects. GMS energy studies (footnote 41) been accorded high priority by Indonesia and Malaysia, forecast that the priority for the next 10 years would still and is in an advanced stage of processing. The project will be the interconnection projects, allowing large-scale power involve the construction of a 500-kilovolt high voltage exchanges between hydro-rich countries and thermal- direct current power transmission line between Melaka and dominated importing countries in the subregion. Pekanbaru.42 The rationale for the project is to exchange expensive peak load against cheaper base load in the other ASEAN Power Grid and BIMP-EAGA. The development country by making use of the (i) one-hour time difference of the energy sector in BIMP-EAGA territories is generally between the two countries, and (ii) difference in peak hours uneven—some areas still rely on costly imported fossil fuel and load curve pattern where Malaysia has a day peak while and require additional generation capacity. On the other Sumatra has a night peak. hand, other EAGA territories have power surpluses of renewable energy that could be traded across borders if the Trans-ASEAN Gas Pipeline. The TAGP aims to transmission infrastructure were available. Interconnected interconnect the gas pipeline infrastructure of the ASEAN power transmission systems within EAGA are, therefore, Member States to enable gas to be transported across necessary not only to improve power reliability but to their borders. Under the TAGP Master Plan,43 a total of enhance overall economic efficiency throughout the about 4,500 kilometers (km) of pipeline—mostly under subregion in an environmentally sustainable way. The the sea—would be constructed to link with existing gas BIMP-EAGA Energy Working Group has identified cross- pipelines at an estimated cost of about $7 billion. The border interconnection projects for cooperation between concept involves linking the major load centers and sources Sarawak and West Kalimantan, and between Sarawak and of natural gas through a gas pipeline from Thailand along Brunei Darussalam. They have also identified projects Peninsular Malaysia, Sumatra, and Java, with supporting for cooperation in new and renewable energy resources, links to large fields in Sarawak, Brunei Darussalam, Sabah, and energy efficiency and conservation initiatives. and East Kalimantan.

The Sarawak to West Kalimantan Interconnection (Project TAGP includes 11 pipelines that have been agreed upon. No. 6 in the APG) is a high priority energy project in the As indicated in the MPAC, eight bilateral gas pipelines are BIMP-EAGA Implementation Blueprint, 2012−20126. It is currently operating with a total length of 2,300 km—or one of the 12 priority investment projects under BIMP- half of the total planned length of 4,500 km. The projects EAGA’s fast track process, and among the high priority developed link pipelines between Thailand and Myanmar, projects in the MPAC. The project would contribute to the West Natuna and Duyong, West Natuna and Singapore, optimum use of regional energy resources: on the Sarawak South Sumatra and Singapore, Malaysia and Thailand, and side, surplus energy will be exported to West Kalimantan to Singapore and Malaysia (footnote 16). generate additional income, and on the West Kalimantan side, the power system will improve the quality and reliability and lower the cost of power supply, and help 42 The proposed project foresees the construction of a 600-megawatt ±250-kilovolt diversify energy generation portfolio by retiring old high voltage direct current transmission line from Sumatra to Peninsular Malaysia inefficient oil-based power plants. The interconnection is plus converter stations and other transmission facilities. The PLN of Indonesia share of the project cost is $300 million, while the Tenaga Nasional Berhad (TNB of a part of the Trans-Borneo Power Grid (TBPG) stretching Malaysia) share of the project cost is $200 million. from West Kalimantan, Indonesia, across Sarawak, 43 The Trans-ASEAN Gas Pipeline Master Plan was completed by the ASEAN Council Malaysia, and Brunei Darussalam, to Sabah, Malaysia. The of Petroleum in October 2000.

40 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt The ASEAN Council on Petroleum (ASCOPE) is the begun to focus on the gas subsector due to its growing body responsible for implementing the TAGP. At the 20th importance as a source of energy in the subregion. It is ASEAN Ministers of Energy Meeting in Bali in July 2002, forecast that natural gas will be an important source of the Memorandum of Understanding (MOU) on the TAGP electricity generation in the GMS, accounting for 15% of was signed to serve as the cooperation framework among total energy production by 2025 (footnote 33). Given that ASEAN public and private sectors for the expeditious large reserves of LNG are found on the island of Borneo, realization of the TAGP project. Under the MOU, an GMS is likely to be importing in increasing amounts. The ASEAN Gas Consultative Council (AGCC) was established GMS could use the TAGP to exploit economies of scale to facilitate and assist the ASCOPE in the implementation to enhance security of supply by sharing outputs of gas of the MOU. The ASCOPE Gas Centre was established in through the pipeline. As the use of natural gas in the GMS Malaysia to serve as the strategic technical and information increases over the long term, a more coordinated approach resource, and capacity building center in the facilitation with ASEAN on policy and interconnection may be and implementation of the TAGP and gas development warranted. A GMS regional master plan for LNG is being programs in ASEAN. planned in 2012–2015, which will cover, among other areas, developing the gas market and gas logistics network, In the updated TAGP Master Plan, four other pipelines and ensuring the safety and security of gas pipelines. were considered involving connections between East Natuna and Java, both in Indonesia, with Malaysia, Convergence of Energy Sector Strategies. The goals Thailand, and Viet Nam; and Brunei Darussalam–Sabah, and strategies of energy cooperation in ASEAN, GMS, Malaysia–Palawan, the Philippines. The updated master and BIMP-EAGA are complementary, and converge plan has indicated that the demand for natural gas is likely in several dimensions. Grid connectivity for electricity to outpace supply. The ASCOPE has been tasked to look and gas is considered essential by ASEAN and the three for new sources of gas supply, including liquefied natural subprograms in securing energy supply within the region, gas (LNG) and coal bed methane. East Natuna remains the and would require the extensive interconnection of main source of supply, and its commercialization is a key to networks. Grid connectivity is a regional public good and, addressing the supply gap. therefore, it is predominantly in the public sector domain. Thus, improvements in policy regimes, harmonization of Natural gas in the GMS. In the GMS, piped natural gas is operational standards and system codes, and coordination used mainly to generate electricity. Historically, the natural of institutional mechanisms are recognized as important gas subsector in the GMS has been addressed through and are being addressed by the relevant ASEAN and GMS participation of GMS countries in ASEAN primarily bodies. because the largest gas reserves are outside the GMS. The only gas trade in the region at present is the export of gas The subregions’ objective of providing electricity to rural from Myanmar to Thailand. The GMS presently does not and isolated areas would utilize the interconnection have a coordinated policy framework for the production arrangements under ASEAN, although off-grid and and distribution of natural gas, although Thailand has a decentralized energy systems are also being planned. In well-developed framework to support its imports of natural the field of renewable energy, ASEAN has set the goal of gas from Myanmar. Trade in natural gas occurs mainly achieving a 15% target share of renewable energy in the within the subregion through long-term contracts, with ASEAN power generation mix. The GMS and BIMP- Myanmar as the only exporter (given the uncertainty over EAGA initiatives in promoting the development of Cambodia gas). Thailand is the main importer, followed renewable energy—including biomass, biofuel, solar, by the Lao PDR, which imports in small quantities. wind, and geothermal—would contribute to attaining this However, a number of individual projects and the required target. ASEAN, GMS, and BIMP-EAGA have ongoing infrastructure have been identified involving the People’s and planned initiatives for the development of clean coal Republic of China (PRC) and Myanmar. For instance, technology, and the reduction of carbon and greenhouse the China National Petroleum Corporation has signed a gas emissions from coal plants. Both the ASEAN and GMS number of production contracts with Myanmar to allow programs have articulated plans to promote trade and crude oil and natural gas exploration on the western investment in the coal subsector. Myanmar coast.

The gas pipeline projects being discussed in ASEAN have mainly focused on links outside the GMS, and recent discussions on the TAGP exclude new links within the GMS. However, the GMS Energy Sector Roadmap has

strategy and program links 41 Transport and Trade Facilitation mutual recognition of driver’s licenses, and compliance with compulsory insurance, among others. The AFAMT ASEAN Cooperation in Transport Facilitation. specifies the rules governing multimodal transport Transport and trade facilitation is vital to the realization operators, contracts, and documents; and the liabilities of of economic integration under the ASEAN Economic the multimodal operator, as well as the consignor. Community (AEC). While investments in transport infrastructure have led to increased physical connectivity Although these three agreements on transport facilitation in ASEAN, the ease of moving goods and people across have been signed, the ratification of the protocols remains borders remains a challenge on account of the many policy, to be completed, and domestic regulations in some ASEAN regulatory, and procedural impediments that still exist. countries would need to be aligned to fully operationalize Many of these impediments require changes in existing them. There was a noticeably long hiatus—from the national laws and regulations to conform with regional signing of the AFAFGIT in 1998 to the signing of AFAMT or international norms. These changes could involve in 2005 and AFAFIST in 2009—before the momentum harmonization of standards, building of comprehensive for ASEAN transport facilitation took off again, possibly databases, and application of advanced technology— coinciding with the promulgation of the AEC in 2006. all of which could be constrained by limitations in Table 15 shows the status of ratification of the three national resources, institutions, and capacities. ASEAN ASEAN agreements. commitments have helped to influence the pace and direction of national efforts at reducing nonphysical ASEAN has also adopted the Roadmap for the Integration barriers to trade. of Logistics Services in 2007, which contemplates measures to liberalize logistics services and expand the Since 1992, the goal of integrating the transport sector has capability and enhance the competitiveness of logistics been a key element of ASEAN economic cooperation, and services providers, among others. The roadmap identifies was operationalized and guided by a series of consecutive 11 logistics services sectors for substantial liberalization.45 plans of action and roadmaps.44 The ASEAN Strategic Moreover, the AEC Blueprint has also set targets to remove Transport Plan (ASTP), 2011–2015 reflects four specific substantially all restrictions on logistics services by 2013, goals on transport facilitation to (i) establish an integrated and allow for a phased increase in foreign (intra-ASEAN) and seamless multimodal transport system, (ii) enhance equity participation up to 2013 in logistics services. Not all the competitiveness of ASEAN’s logistics industry, ASEAN Member States had achieved these commitments (iii) establish a safe and secure inter-state transport system, as of 2010; that is, some of them are still in the process and (iv) develop environment-friendly logistics. of addressing the required domestic legislation to allow for market access liberalization. There are three important ASEAN agreements on trade facilitation: Transport Facilitation in the GMS. The Cross-Border Transport Agreement (CBTA) is a pioneering landmark (i) ASEAN Framework Agreement on the Facilitation of accord in the GMS, which consolidates, in a single legal Goods in Transit (AFAFGIT) (1998), instrument, all of the key nonphysical measures for (ii) ASEAN Framework Agreement on Multimodal efficient cross-border land transport. The CBTA, with its Transport (AFAMT) (2005), and annexes and protocols, embodies most of the provisions (iii) ASEAN Framework Agreement on the Facilitation of covered in the AFAFGIT signed in 1998. As discussed Inter-State Transport (AFAFIST) (2009). in the preceding section, not much impetus was given to the AFAFGIT until 2007 (shortly after the AEC was The AFAFGIT specifies transit rights while AFAFIST launched), after which the implementation of AFAFGIT specifies inter-state transit rights; and both contain (and, subsequently, the ASEAN Customs Transit System provisions governing conditions for road transport, [CTS]) was given priority focus. Work in these two areas including harmonization of road traffic regulations, has since moved quickly ahead, overtaking efforts by the registration of transit transport services, designation GMS to implement similar provisions under the CBTA. of transit transport routes, provision of facilities and services, mutual recognition of inspection certificates,

45 These 11 sectors are (i) maritime cargo handling services, (ii) storage and warehousing 44 These include the ASEAN Plan of Action in Transport and Communications, services, (iii) freight transport agency services, (iv) courier services, (v) packaging 1994–1996; Transport Action Agenda and Successor Plans of Action, 1996–1998 services, (vi) customs clearance services, (vii) maritime transport services, (viii) air and 1999–2004; ASEAN Transport Action Plans, 2005–2010 and 2011–2015; and, freight services, (ix) rail freight transport services, (x) road freight transport services, most recently, the MPAC. and (xi) other auxiliary services.

42 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt 2/10/00 19/4/10 19/4/10 10/8/10 16/10/03 into Force have ratified among those countries that Date of Entry E ntry into force 2/7/01 3/4/12 24/6/99 1/11/11 29/3/01 10/10/07 15/11/99 15/11/99 26/11/12 15/11/02 Viet Nam Viet 8/1/03 3/9/12 22/6/11 19/4/10 19/4/10 17/2/99 11/7/08 23/8/03 Thailand 30/11/11 2/5/06 2/5/06 2/10/00 29/8/02 30/3/06 12/9/07 Singapore (as of 12 A pril 2013) 5/5/03 20/5/99 22/9/03 30/6/08 13/11/07 25/11/99 26/11/09 28/11/12 26/11/09 Philippines 21/8/00 21/8/00 25/4/03 16/12/98 16/10/03 10/10/02 Myanmar 2/3/99 24/7/09 24/7/09 26/3/02 10/8/10 Malaysia Dates of Ratification by Member States 9/5/01 19/1/00 19/1/00 6/11/02 20/6/11 19/5/03 Lao PDR 21/12/99 23/6/00 23/6/00 13/1/00 30/7/02 24/8/03 24/11/11 31/12/02 Indonesia 9/5/07 9/5/07 9/5/07 30/4/99 30/1/02 23/5/03 27/10/09 27/10/09 Cambodia 8/9/04 8/9/04 8/4/02 7/8/10 Brunei 15/8/00 30/3/04 19/10/09 Darussalam 8/4/01 Signing Date of 15/9/99 15/9/99 8/02/07 20/9/02 16/12/98 16/12/11 27/10/00 17/11/05 10/12/09 ypes A F G I T ) ransport ransit osts a ransport echnical ransit ( A F A FIS T ) AMT ) ransport T ransit System P rotocol 1 – D esignation of T P rotocol 2 – D esignation of P Frontier P rotocol 3 – T and Quantity of Road Vehicles P rotocol 4 – T R equirement of Vehicles P rotocol 5 – A S EAN Scheme of M otor Compulsory Vehicle Insurance R outes P rotocol 6 – R ailways Border and Interchange Stations P rotocol 7– Customs T P rotocol 8 – Sanitary and P hytosanitary M easures P rotocol 9 – D angerous G oods AFAMT’s entry into force is on the 30th day after deposit of second instrument ratification or acceptance, and effective only among ASEAN Member States that have ratified it accepted it. AFAMT’s Agreement/Protocol ASEAN Framework ASEAN Framework A greement on the of Inter- Facilitation State T ( A F Democratic Republic. ASEAN = Association of Southeast Asian Nations, Lao PDR People’s N ote: D ate format is day/month/year. ASEAN Framework ASEAN Framework A greement on the of G oods Facilitation in T Status of Ratification for ASEAN Transport Facilitation Agreement 15: Status of Ratification for ASEAN Transport Facilitation Table a Source: A S EAN Secretariat. ASEAN Framework on ASEAN Framework M ultimodal T ( A F

strategy and program links 43 All of the GMS countries have signed all the CBTA of the CTS with that of ASEAN. Traffic rights under the annexes and protocols, and most countries have ratified CBTA relate only to the designated corridors and are all of the annexes and protocols. To date, only two have limited in number. This limitation increases the delivery not yet completed ratification: Thailand has ratified 14 and cost of goods to their final inland destination. Bilateral Myanmar 15 out of the 20 annexes and protocols, and both exchange of traffic rights has been adopted by the Lao PDR countries are committed to completing the ratification of and Viet Nam, Cambodia and Thailand, and Cambodia the remaining annexes and protocols as soon as possible. and Viet Nam; however, on the whole, implementation of the exchange of traffic rights remains slow. Expansion of Initial implementation of the CBTA at pilot border-crossing bilateral and trilateral exchange of traffic rights and their points46 has commenced, although focusing only on single- implementation are needed to generate the appropriate window and single-stop modalities. Progress has also been network externality for GMS corridors.47 made on various aspects of the CBTA: (i) additional border crossings for CBTA implementation have been agreed to The second problem pertains to the CTS, which is a core between the People’s Republic of China (PRC) and the element of any trade facilitation arrangement. An analysis Lao People’s Democratic Republic (Lao PDR) along the of the CBTA CTS conducted in 201148 observed that the North−South Economic Corridor, and between Cambodia CTS provisions of the CBTA formulated in 1999 is largely and Viet Nam along the Southern Economic Corridor; outdated and cumbersome, and has been largely unutilized. (ii) a public–private partnership for implementing the CTS The design of the CBTA CTS was based on the provisions has been established through the designation of private of the Transit International Routier (TIR). However, entities as guaranteeing organizations and agreement on a several deviations from TIR were incorporated into the guarantee network; and (iii) the Lao PDR, Thailand, and CTS, with the effect of creating a substantial divergence Viet Nam have agreed on a GMS road transport permit from the World Customs Organization standards (Box 7). along the East−West Economic Corridor, as well as the The analysis concludes that the concepts and principles establishment of a CBTA fast track at the border checkpoints. applied to the design of the CBTA in 1999 have changed and would need to be adjusted to take into account more Notwithstanding these developments, CBTA recent developments. The study recommended that the implementation faces a number of serious problems. Traffic CBTA be aligned with the New CTS (NCTS) recently volumes in designated pilot sites are low by international approved by the ASEAN directors-general of customs, with standards. Procedures for border clearance do not follow a rejoinder that the PRC could eventually be brought into best practice—control over cargo is weak and susceptible the system. The NCTS, patterned after a European Union to fraud. Interagency coordination is limited, some model, is the basis for the design of AFAFGIT Protocol 7, processes executed by relevant agencies are redundant, and which was recently completed and signed in March 2012. exchange of information among them is either lacking or unsystematic. The required border infrastructure to The NCTS was designed in the context of a regional facilitate efficient inspection and clearance, especially for economic community and is currently used in the European single window processing, is also either inadequate (e.g., Union. It is a fully-computerized system that conforms lack of off-lane processing facilities) or poorly constructed. to all of the standards and principles of the World Trade Infrastructure constraints will become more binding Organization and World Customs Organization. Key when electronic processing and automated procedures are features of the NCTS include a single-page document for eventually adopted and applied. goods and a single guarantee to cover potential customs debt; no separate approvals and documents are required for trucks Two major issues in the implementation of the CBTA are and containers. The development of the ASEAN NCTS (i) transport facilitation: the slow progress in the exchange takes into account the need for technical modernization of traffic rights; and (ii) trade facilitation: the alignment to accompany the design of efficient processes to secure benefits for both the public and private sectors.

46 Six border crossing points (three pairs) have started implementing the CBTA: Lao Bao (Viet Nam)–Dansavanh (the Lao PDR) in 2005 under Single Stop Inspection The alignment of the GMS CBTA CTS with the ASEAN’s modality; and Mukdahan (Thailand)–Savannakhet (the Lao PDR) in 2006, NCTS would need to be addressed given that the GMS and Hekou (the PRC)–Lao Cai (Viet Nam) in 2007 under the Single Window members of ASEAN have signed the agreement to Inspection modality. A CBTA operations manual for each border was prepared for border officials and relevant provincial and central government agencies. An MOU was also negotiated for Bavet (Cambodia)–Moc Bai (Viet Nam) in March 47 2006, but less progress has been achieved at this border crossing pair. At the Poipet ADB. 2010. Transport and Trade Facilitation in the GMS: Issues and Proposed (Cambodia)–Aranyaprathet (Thailand) border crossing, constraints, including Program of Actions. Manila. Unpublished. bilateral political issues and a longstanding border demarcation question, have 48 ADB. 2011. Implementation of the CBTA Customs Transit System: A Review and substantially delayed progress. Analysis of the Current State of Play. Unpublished.

44 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Box 7: Limitations of the GMS Cross-Border Transport Agreement Customs Transit System

• The design of the Cross-Border Transport Agreement (CBTA) Customs Transit System (CTS) was based on the provisions of the Transit International Routier (TIR). However, several deviations from TIR were, in fact, incorporated into the CTS with the effect of creating a substantial divergence from the World Customs Organization standards. • There is no computerization of operations proposed at any level and controls are, or would be, entirely manual. • Under the CBTA, the CTS is optional for the transport operators. • The CTS uses a multipart customs clearance document in a format similar to the regional ASEAN Customs Clearance Document, which also records the guarantee. This document is quite cumbersome, consisting of about 30 pages for a single journey to three countries. • There is no regional guaranteeing organization; a freight transport association is approved in each country to issue the customs clearance document exclusively to its members. • There is no simplified procedure granted as an incentive to traders with a good record of revenues.

GMS = Greater Mekong Subregion. Source: ADB. 2011. Implementation of the CBTA Customs Transit System. A Review and Analysis of the Current State of Play. Unpublished.

implement the ASEAN CTS (Protocol 7). Meanwhile, Transport of Goods—to facilitate the efficient movement of the PRC is planning to join the Convention on the goods across EAGA borders and promote the establishment International Transport of Goods Under Cover of TIR of an EAGA multimodal transport system, including Carnets (TIR Convention). In view of these developments, RoRo facilities. The MOU responds to the decision of the close coordination and consultation between relevant 4th BIMP-EAGA Summit in 2007 to undertake specific ASEAN and GMS bodies would be needed to align measures to pilot test the AFAFGIT. The ASTP, 2011–2015 their CTS. makes reference to the need to expedite the implementation of existing bilateral, as well as subregional arrangements Transport Facilitation in BIMP-EAGA. The key applicable to BIMP-EAGA, on the facilitation of inter-state initiatives of the subprogram in transport facilitation passenger land transportation. Based on the assessment are embodied in three MOUs on land (movement of of the results of these arrangements, a regional ASEAN commercial buses and coaches), sea, and air linkages signed arrangement can be developed. The BIMP-EAGA MOU in 2007. The provisions covered by the MOUs include on Transit and Interstate Transport of Goods seems to be the (i) specification of traffic rights and market access; the only arrangement that explicitly presents itself as a pilot (ii) designation of covered routes and determination of case for an ASEAN framework. capacity and frequency; (iii) exchange of information, database development, and joint studies; (iv) adherence The traffic rights and market access provisions of the to safety, security, and environmental provisions based on MOU on Transit and Interstate Transport of Goods are international standards; and (v) institutional arrangements basically governed by the provisions of AFAFGIT and (Table 16). The MOUs on sea and air linkages have been AFAFIST. The designated transit transport routes have discussed in detail in the previous sections on maritime and been negotiated based on Protocol 1 of AFAFGIT, and air transport, with the observation that the (i) provisions of finalized in January 2011.The MOU also encourages all the MOUs are consistent with, or draw from, the relevant countries to ratify the AFAMT. Consistent with ASEAN ASEAN agreements; and (ii) designated routes in the three agreements, the MOU also provides for the facilitation of transport modes are located in priority economic corridors interstate traffic through the simplification; streamlining; of BIMP-EAGA. Thus, these MOUs reflect BIMP-EAGA’s and harmonization of customs import, export, transit shared goal with ASEAN of facilitating the transport of procedures, and sanitary and phytosanitary measures. goods and people as means toward achieving the goal of economic integration. Efforts are ongoing to improve the Trade Facilitation in BIMP-EAGA. BIMP-EAGA has implementation of the three MOUs, as well as to identify recently embarked on a customs, immigration, quarantine, measures for further accelerating the liberalization of and security (CIQS) initiative to be implemented at the transport services in the subregion (Box 8). specific entry points in the subregion. The first set of pilot ports are (i) Muara Port (Brunei Darussalam), (ii) Sandakan In 2009, the BIMP-EAGA countries signed another Port (Malaysia), (iii) Labuan Port (Malaysia), (iv) Bitung milestone agreement—the MOU on Transit and Interstate Port (Indonesia), (v) General Santos Port (the Philippines),

strategy and program links 45 Table 16: Main Features of the BIMP-EAGA Memorandums of Understanding on Air and Sea Linkages, and Commercial Buses and Coaches

Air Linkages Sea Linkages Commercial Buses and Coaches Traffic Rights Priority and Pioneering Shipping Services Traffic Rights and Market Access • Cover scheduled and chartered international • Granting of port tariff incentives for • Transport operators inbound and outbound air services for the carriage of passengers, pioneering shipping services within territory, local agents in host countries baggage, cargo, and mail • Joint measures to promote the commercial to be assigned • Designated points where 3rd, 4th, and 5th viability and sustainability of shipping • In transit, prohibited to board passenger; freedom rights will apply services to priority and pioneering routes, drop offs allowed only at designated such as (i) facilitation of entry; (ii) temporary disembarkation points Airline Designation exclusive rights; (iii) market-based freight • Chartered buses allowed based on • As many airlines as contracting parties to rates; and (iv) compliance with minimum application operate the agreed services on the specified safety, security, and environment standards • Transport operators obliged to adhere routes of International Maritime Organization to safety standards and provide route information Capacity and Frequency Designated Ports • Market-based pricing • No restrictions on designated airlines as to • Designation of gateway and domestic ports capacity, frequency, and aircraft type for promoting maritime transport Designated Routes • Allows co-terminalization and linkages • Designated routes and points of entry and among airlines to serve routes not served by Capacity and Frequency exit: based on Protocol 1 of the ASEAN national carriers • Determined in the process of granting Framework Agreement for the Facilitation of • No carriage of cabotage traffic temporary exclusive rights for priority and Goods in Transit pioneering routes either on a bilateral or multilateral basis Capacity and Frequency • Mutually agreed based on reciprocal arrangement either on bilateral or multilateral basis BIMP-EAGA = Brunei Darussalam−Indonesia−Malaysia−Philippines East ASEAN Growth Area. Sources: Compiled from the BIMP-EAGA memorandums of understanding on air linkages, sea linkages, and commercial buses and coaches.

and (vi) Zamboanga Port (the Philippines). The two priority practices.50 Based on the identified gaps between existing border crossings are Entikong and Tebedu. These pilot ports practice and international standards, specific actions and and paired border crossing were selected based on port reforms will be implemented at pilot ports and priority traffic and analysis and a mapping exercise that determined entry points in BIMP-EAGA. Actions to close the gaps readiness to implement improvements in port operations could be in the form of capacity building measures or and standards. In implementing the areas of reform in technical improvements that are within existing national the pilot sites, the following facilitation measures would policies. It is intended that the eventual outcome of the be given high priority: (i) integrated and one-stop CIQS BIMP-EAGA CIQS initiatives would be the alignment of services, (ii) advance provision of information, (iii) risk CIQS rules, regulations, and procedures at EAGA ports management, (iv) harmonization of documentation of and land border crossings. procedures, and (v) adoption of port security measures.

The BIMP-EAGA CIQS Task Force was established as the coordinating body to oversee the implementation of the CIQS initiative. It has finalized the draft MOU on 50 There is consensus among experts and customs, immigration, quarantine, and CIQS Harmonization,49 which will be ready for signing security (CIQS) officials in BIMP-EAGA that these should be the standards upon completion of the necessary domestic consultations. enshrined in the following: (i) ASEAN Single Window Agreement; (ii) APEC Single Window Strategic Plan; (iii) World Customs Organization Framework of The MOU seeks to promote compliance with applicable Standards to Secure and Facilitate Global Trade (‘SAFE’ Framework); (iv) Revised national and international CIQS standards and best Kyoto Convention on the Simplification and Harmonization of Customs Procedures; (v) World Trade Organization Agreement and the subsidiary Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement); (vi) International Standards of the World Health Organization for Animal Health; and (vii) International Standards for Phytosanitary Measures developed by the International Plant Protection Convention, ASEAN Framework Agreement on Mutual Recognition Agreements, ASEAN Framework Agreement on the Facilitation 49 Endorsed at the 18th Senior Officials Meeting and 14th Ministers Meeting in of Goods in Transit, and the International Ship and Port Facility Security Code and August 2009. relevant International Convention for the Safety of Life at Sea regulations.

46 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Box 8: Measures for the Enhancement of the BIMP-EAGA Memorandums of Understanding on Air Linkages, Sea Linkages, and Commercial Buses and Coaches

The Brunei Darussalam−Indonesia−Malaysia−Philippines East ASEAN Growth Area (BIMP-EAGA) countries have identified several initiatives to improve the three memorandums of understanding (MOUs) on air linkages, sea linkages, and commercial buses and coaches. These initiatives, which are reflected in the BIMP-EAGA Implementation Blueprint, 2012–2016, include the following:

For the three MOUs • Conduct of a study in 2013 to assess bottlenecks in the implementation of the MOUs with the view to enhance its implementation

For the MOU on Air Linkages • Expansion of the designated points or routes to include additional points outside BIMP-EAGA under the original co- terminalization scheme, • Allowing airlines to embark on more flexible routing and scheduling, and • Conduct of a study on the rationalization and design of airport incentives, and the role of these incentives in the sustainability of routes with the entry of low cost carriers.

For the MOU on Sea Linkages • Drafting of an MOU to provide guidelines for the regulation and safety standards of nonconventional sized ships, and • Consideration of measures to expand the designated routes.

For the MOU on Commercial Buses and Coaches • Review of the designated entry and exit points for consistency with Protocol 1 of the ASEAN Framework Agreement for the Facilitation of Goods in Transit, and • Construction of more rest areas in the designated routes.

Source: Compiled from the MOUs on sea linkages, air linkages, and commercial buses and coaches.

Transport and Trade Facilitation in IMT-GT. At objectives in trade and transport facilitation are broadly the 16th Senior Officials Meeting/Ministerial Meeting aligned with that of ASEAN, the subregional groups have in October 2009, the IMT-GT Task Force on CIQ was taken different approaches in pursuing this objective. This established under the Working Group on Trade and could be accounted for partly by the timing of the initiatives. Investment to oversee the IMT-GT initiative on trade The GMS CBTA, which was launched in 1999, had a far facilitation. The mandates of the task force include more comprehensive coverage than the existing ASEAN (i) strengthening of CIQ initiatives to simplify cross- frameworks at that time. But with ASEAN integration border procedures; (ii) promoting the transparency of momentum picking up after the launching of the AEC, the rules, regulations, and procedures at the borders; and NCTS—embodied in Protocol 7 of the AFAFGIT—was (iii) developing a simplified, improved, and time-bound eventually put in place, thus requiring a realignment of the system for processing documents at identified entry points. GMS CBTA. The task force activities were rolled out in 2011 and would follow essentially the same approach as that taken In the case of BIMP-EAGA, the MOU on Transit and for the BIMP-EAGA CIQS initiative. But a difference in Inter-state Transport of Goods (signed in 2009) presented the scope of the improvements is envisaged to conform an opportunity to pilot test some of the provisions of to international standards “plus ASEAN.” As the IMT- AFAFGIT (signed in 2007). The BIMP-EAGA and GT CIQ initiative is still in the very early stages, it is not AFAFGIT are completely aligned with respect to the possible to offer any observation at this point. provisions on traffic rights and market access. In addition, the designated routes under the MOU were negotiated Subregional Links with the ASEAN Transport and based on Protocol 1 (Designation of Transport Transit Trade Facilitation Agreements. Although the subregional Routes) of the AFAFGIT. It is significant to note that

strategy and program links 47 there are explicit references to the BIMP-EAGA MOU on in the maritime and air sectors. This enabled BIMP-EAGA Transit and Inter-state Transport of Goods as a test bed of to be more responsive to problems unique to the subregion the AFAFGIT. (e.g., the problems of nonconventional sized ships and enhancement of RoRo services), without losing sight of the Specific countries’ readiness to implement specific measures need to be consistent with the wider ASEAN agreements under a framework agreement is another factor that and international conventions. The BIMP-EAGA MOU could influence the approach to a subregional initiative on Transit and Inter-State Transport is perfectly aligned in transport and trade facilitation. When the CBTA was with AFAFGIT; it provides an ideal test bed for ASEAN formulated, only two of the GMS countries (the PRC and initiatives. The important task ahead is to determine how Thailand) could have managed an implementation of any the pilot testing will be implemented. computerized CTS component across their territories. Thus, across the region, it was not feasible to implement anything for the CBTA other than a manual CTS. Other Findings and Observations: prerequisites for infrastructure (roads, bridges, and telecommunications) and common transport rules were also Operational Level Review relatively undeveloped at that time. These circumstances have now changed significantly: GMS customs authorities There are a number of insights that emerged from the now possess the experience and skills that place them in foregoing review. First, across all connectivity areas covered a relatively better position to implement a computerized in the review, there is evidence of links in various forms. The CTS across the region. links can be purposive and intended, such as the BIMP- EAGA MOU on Transit and Interstate Transport of Goods The BIMP-EAGA CIQS initiative is envisaged to link with as a test bed for AFAFGIT, or they can be random and the National Single Window and ASEAN Single Window unintentional, such as segments of the ASEAN Highway initiatives in terms of data sharing, communicability, and Network (AHN) coinciding with those of the subregional comparability. The gap analysis, which became the basis for corridors. Links can also take the form of connectivity action plans, was benchmarked against the ASEAN Single expansion, such as the GMS plan for railway expansion Window, as well as international standards and conventions beyond the Singapore−Kunming Rail Link. Generally, in the various subsectors (customs, immigration, the review shows that the links between ASEAN and the quarantine, sanitary, and phytosanitary measures). The subregional programs have tended to be more purposive action plans may have to take into account more recent following the AEC launch in 2007, along the same pattern developments in Protocol 7 under AFAFGIT to ensure observed for the strategy level review. This was evident that they align with ASEAN-wide frameworks, as well as especially in the area of transport and trade facilitation, with the BIMP-EAGA MOU on the Transit and Inter-state with many ASEAN and subregional agreements and Transport of Goods. protocols being forged and aligned starting in 2007.

The GMS and BIMP-EAGA experiences in transport Second, both ASEAN and the subregional programs and trade facilitation initiatives offer useful insights have unique roles to play while pursuing shared goals. on the top-down and bottom-up approaches to the The subregional programs have played a critical role in implementation of a regional program. The GMS CBTA translating the goal of ASEAN physical connectivity into essentially followed a top-down approach that started specific area contexts, taking into account their unique with a comprehensive agreement. However, this became geography, in pursuit of specific development strategies. For too cumbersome to implement, resulting in delays that instance, subregional corridor development has provided caused some of the schemes to be outdated. Moreover, depth to the minimum standards of connectivity implied the pilot sites were not carefully selected in terms of by the AHN, and has allowed the ASEAN Member States sufficiency in traffic volume, infrastructure preparedness to address specific physical constraints impeding economic (hardware), software preparedness (legal mandates, rules, integration. Subregional corridor development became regulations and procedures, and institutional capacities), the means by which ASEAN could link more intensively and technology readiness. with the PRC, and farther west to India and the rest of South Asia. On the other hand, the BIMP-EAGA’s approach was incremental, bottom-up, and pragmatic. The MOUs The contribution of subregional corridors to the on transport linkages were largely driven by the need to promotion of trade and economic growth has helped address specific constraints in EAGA’s unique archipelagic narrow the development divide, which is crucial for state by focusing on transport facilitation and liberalization distributing the benefits of integration. Meanwhile,

48 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt ASEAN has played an effective leading role in region- Fifth, links develop from a top-down approach, as well wide harmonization of operational standards and system as from a bottom-up approach. The ASEAN Power Grid codes, coordination of institutional mechanisms, and and Trans-ASEAN Gas Pipeline (TAGP) are examples synchronization of improvements in policy regimes under of top-down initiatives where ASEAN defined grid a common framework. For instance, it is inevitable that the interconnections envisaged to show progress initially ASEAN CTS (Protocol 7 of the AFAFGIT) will become through bilateral arrangements, gradually expanding to the standard for the GMS members of ASEAN, with a subregional basis, and finally moving to an integrated alignment with the CBTA to address the circumstances of regional power system. In the case of the TAGP, however, the PRC. the interconnections are mostly outside the GMS. Given that the use of natural gas in the GMS will increase over Third, the flexibility accorded by subregional programs the long-term, the GMS plans of tapping the TAGP for can help promote linkages between subregional programs its source of gas supply through the pipeline will require a and ASEAN. Through their participation in subregional coordinated approach with ASEAN. programs, the ASEAN Member States are given the flexibility to pursue strategies that are more adaptable to Finally, the scale of a subregional initiative could affect the their needs and unique circumstances. It affords them the pace of its implementation. The GMS CBTA, launched opportunity to “test the waters,” participate incrementally in 1998, had comprehensive coverage relative to the in activities where capacity may still be lacking, and allocate AFAFGIT signed in the same year. The comprehensive resources where national and regional priorities align. nature of CBTA, however, made it difficult to implement, ASEAN may designate priority ports across the region, causing significant delays and leading to more recent while the subregional programs, through an MOU, can developments overtaking some of its provisions as in the further designate ports in priority and pioneer routes in case of the CTS. Moreover, only the PRC and Thailand the subregion. The subregional programs can also provide had the capacity to implement a digitized system during incentives to weak and unviable ports, and take joint the CBTA’s initial years, making a manual system the measures to promote efficiency in port operations. only feasible alternative at that time. In contrast, the BIMP-EAGA CIQS initiative has taken a more pragmatic Fourth, the timing of the initiatives could influence the approach by pursuing incremental improvements in the links between ASEAN and the subregional programs. With operational efficiency gaps of selected ports to conform with most of the AFAFGIT protocols coming into effect starting international standards and conventions. A component of in 2007, BIMP-EAGA saw an opportunity to pilot test its these improvements is to develop the technical capacity to provisions through the MOU on Transit and Interstate provide data inputs to the digitized systems of the National Transport of Goods (signed in 2007). The MOU seems Single Window and ASEAN Single Window. to be the only subregional agreement so far that explicitly articulates the objective of pilot testing the AFAFGIT. Table 17 summarizes the links that have been observed The CLMV Agreement on the Subregional Cooperation between ASEAN and the subregional programs, as well as in Air Transport (1998) and the BIMP-EAGA MOU on among the subregional programs, in selected connectivity Air Linkages (2007) both preceded the ASEAN MAAS areas. It also indicates the broad measures that can be taken (2009). The MAAS, thus, consolidated the features of these to further promote or expand these links. The institutional earlier subregional agreements by explicitly reflecting the implications of promoting the links are tackled in Section designated points in the ASEAN subregions that were part IV of this report. of the earlier agreements. In addition, the MAAS provided more extensive coverage pertaining to customs duties and tariffs and user charges, as well as fair competition, not covered in the BIMP-EAGA MOU and CLMV agreement. The timing of the initiatives allowed both ASEAN and the subregions to build their efforts toward accelerating the pace of cooperation.

strategy and program links 49 Table 17: Operational Level Links between ASEAN, GMS, BIMP-EAGA, and IMT-GT in Selected Connectivity Areas

Connectivity Area Existing Links Measures to Promote or Expand Links Corridor Development Subregional programs provide the geographic ASEAN to take into account subregional focus for physical connectivity in ASEAN. corridors in prioritizing segments or components of various transport plans, e.g., the ASEAN Highway Network (AHN) All subregions recognize the need to move Subregional programs to align the corridor toward an integrated multimodal transport development with the ASEAN efforts to system along ASEAN’s trajectory. develop multimodal transport systems; coordinate with ASEAN efforts on the setting of technical, safety, and security standards for multimodal transport ASEAN Highway Network About half of AHN routes are part of, or ASEAN to take into account the connectivity linked to, segments of subregional corridors; needs of subregional corridors in determining two-thirds of these routes are in the GMS. AHN priorities for construction and upgrading Cross-border links in the AHN are mostly ASEAN to give priority to cross-border found in Thailand (13) and the Lao People’s highway links in expanding and upgrading Democratic Republic (11). AHN routes Ferry links as part of the AHN are found in BIMP-EAGA and IMT-GT to further develop Cambodia, Indonesia, and the Philippines. and expand ferry links as part of the AHN Singapore−Kunming Rail Link The missing link in the Singapore–Kunming GMS to implement this project successfully Rail Link (SKRL) from Poipet to Sisiphon in and link with ASEAN for interoperability with Cambodia is included in the GMS Vientiane the rest of SKRL Plan of Action. The inclusion of the railway subsector in the GMS to pursue further expansion of the GMS transport strategy holds prospects for railway routes and address the software expanding the railway network beyond the components that are essential for SKRL. interoperability, which must be coordinated with the ASEAN initiatives in this area IMT-GT is pursuing a number of railway projects between southern Thailand and Software components for interoperability of northern Malaysia, and within Sumatra subregional rail routes to be aligned with independently of SKRL. region-wide efforts Maritime Transport More than half of the 47-ASEAN designated BIMP-EAGA and IMT-GT to continue with ports are in the subregions, and mostly in the port improvements, such as those prioritized priority corridors. under their implementation blueprints BIMP-EAGA hosts 16 of the ASEAN- BIMP-EAGA to implement effectively the MOU designated ports. The Memorandum of on Sea Linkages; provide incentives to weak Understanding (MOU) on Sea Linkages is and unviable routes, and expand designated helping to improve the efficiency of the ports as appropriate; and further liberalize ASEAN Port system. shipping services as building blocks to the ASEAN Single Shipping Market BIMP-EAGA NCSS initiative to consider possible extension to IMT-GT where the use The BIMP-EAGA initiative on nonconventional of NCSS also dominates informal trade sized ships (NCSS) broadly supports the ASEAN maritime safety goals, and addresses the unique features of the subregion’s trading environment. ASEAN to consider using BIMP-EAGA and Development of roll-on/roll-off (RoRo) IMT-GT as the hub of its RoRo network, services in selected BIMP-EAGA and IMT- building from pilot initiatives in the subregions GT ports supports the goal of ASEAN RoRo Network in the Master Plan for ASEAN Connectivity. Continuation on next page

50 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Table 17 continued Connectivity Area Existing Links Measures to Promote or Expand Links Air Transport The BIMP-EAGA MOU on Air Linkages (2007) BIMP-EAGA to pursue further expansion paved the way for the Multilateral Agreement in coverage of the MOU on Air Linkages, on Air Services (MAAS) (2009); it serves as conduct assessment study, and rationalize a building block to ASEAN goal of air services airport incentives; ASEAN to encourage full liberalization. ratification of the MAAS The MAAS specifically provides the lifting ASEAN to fully implement the MAAS toward of restrictions of up to 5th freedom the ASEAN Single Aviation Market, and move rights between ASEAN cities and ASEAN beyond 5th freedom rights subregions, specifically referring to BIMP-EAGA, IMT-GT, and CLMV to start BIMP-EAGA and IMT-GT; and Cambodia, the moving to 6th freedom rights and beyond, Lao PDR, Myanmar, and Viet Nam (CLMV). but an ASEAN-wide agreement would be It also provides a direct link to air transport difficult on account of diverse views of the initiatives of subregional programs. It ASEAN Member States consolidated earlier initiatives and broadened the scope of air services liberalization. Energy There is broad convergence among ASEAN ASEAN and subregional programs to and the subregional programs in terms of the coordinate efforts on various initiatives in (i) development of grid connectivity for power these areas and gas; (ii) harmonization of regulatory frameworks; (iii) promotion of clean coal technology; and (iv) sustainable energy development through renewable energy, among others. The BIMP-EAGA Sarawak–Kalimantan BIMP-EAGA and IMT-GT to ensure successful Interconnection and IMT-GT Melaka– implementation of these projects Pekanbaru Interconnection are priority projects in the Master Plan for ASEAN Connectivity. Sarawak–West Kalimantan is also part of the ASEAN Power Grid (APG). The GMS projects in Mae–Moh 3–Nan Hong GMS to ensure successful implementation of Sa and Udon Thani 3–Navong are part of these projects, but at the same time to take the APG. Other projects are being planned; steps to develop a regional proven market however, most power projects in the GMS are export-oriented power generation projects with little interconnection between the GMS countries. This is consistent with the GMS strategy focusing on the development of a regional power market. The GMS regional master plan for natural gas GMS to use the Trans-ASEAN Gas Pipeline (2012–2015) is envisaged to address the to exploit economies of scale, enhance likely increase in natural gas imports, which security of supply by sharing outputs of gas may have to be sourced from large reserves through the pipeline, and develop a more in Borneo, East Natuna, and Java. coordinated approach with ASEAN on policy and interconnection due to an increase in the use of natural gas in the GMS

Continuation on next page

strategy and program links 51 Table 17 continued Connectivity Area Existing Links Measures to Promote or Expand Links Transport and Trade Facilitation The GMS Cross-Border Transport Agreement GMS to address CBTA implementation (CBTA) (1998) broadly supported the ASEAN bottlenecks and the need for alignment with goals on trade facilitation and contained ASEAN frameworks, including elements of specific provisions on goods in transit along National Single Window (NSW) and ASEAN the lines embodied in the ASEAN Framework Single Window (ASW) Agreement for the Facilitation of Goods in Transit (AFAFGIT) (1998), but CBTA was more comprehensive. The ASEAN Customs Transit System (CTS) GMS to align CBTA CTS with that of ASEAN under Protocol 7 of AFAFGIT (March 2012) and address the CTS of the People’s consolidated transit procedures. Republic of China in relation to its plans to join the Transit International Routier Convention The BIMP-EAGA MOUs on commercial buses BIMP-EAGA to continue planned expansion and coaches, sea linkages, and air linkages and improved implementation of the MOUs, are contributing to overall ASEAN transport and conduct assessment study to guide facilitation objectives; these draw significantly expansion and improvements from the ASEAN framework agreements. The BIMP-EAGA MOU on Transit and Interstate Transport of Goods (2009) will, BIMP-EAGA to set clear parameters in among others, pilot test the AFAFGIT as pilot testing AFAFGIT toward region-wide the basis for formulating a region-wide implementation agreement. The MOU is completely aligned with AFAFGIT provisions. The BIMP-EAGA customs, immigration, quarantine, and security (CIQS) initiative BIMP-EAGA to use experience in informing links with the NSW and ASW in terms of inputs to ASEAN-wide initiatives, such as the information sharing, and builds on technical NSW and ASW and human resource capacity for compliance with international standards. The IMT-GT CIQS initiative is starting along the same lines as that of BIMP-EAGA based IMT-GT to use experience in informing inputs on international standards plus ASEAN. to ASEAN-wide initiatives, such as the NSW and ASW

ASEAN = Association of Southeast Asian Nations, AHN = ASEAN Highway Network, BIMP-EAGA = Brunei Darussalam−Indonesia−Malaysia−Philippines East ASEAN Growth Area, CBTA = Cross-Border Transport Agreement, GMS = Greater Mekong Subregion, IMT-GT = Indonesia−Malaysia−Thailand Growth Triangle, MAAS = Multilateral Agreement on Air Services, REG = regional, TA = technical assistance. Source: ADB TA 7718-REG Study Team.

52 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt IV. institutional coordination and links

trengthening strategy and program links to Figure 3: Basic GMS Organizational promote complementarity and synergy between Structure the Association of Southeast Asian Nations (ASEAN) and the Greater Mekong Subregion S Leaders’ Summit (GMS), Brunei Darussalam−Indonesia−Malaysia− Philippines East ASEAN Growth Area (BIMP-EAGA), Ministerial and Indonesia−Malaysia−Thailand Growth Triangle Conference (IMT-GT) requires effective mechanisms and arrangements for coordination. This section deals with institutional National coordination and links between each of the three Coordinating Senior GMS Committee and Secretariat Officials’ subregional programs and ASEAN. Specifically, the section National Meeting (i) reviews the existing institutional mechanisms and (ADB) Secretariat arrangements for coordination between the subregional programs and ASEAN, (ii) conducts a comparative Forums and Working Groups assessment of these institutional arrangements and mechanisms, (iii) describes in-country arrangements for ADB = Asian Development Bank, GMS = Greater Mekong Subregion. coordinating and managing these subregional programs Source: GMS Secretariat. and ASEAN activities, (iv) discusses coordination issues and constraints, and (v) identifies possible approaches for enhancing institutional coordination and links between the subregional programs and ASEAN. in each member country. A unit at the Asian Development Bank (ADB) headquarters in Manila provides overall secretariat support to the GMS Program in coordination Review of Institutional with the national secretariats, and ADB’s resident missions in the GMS member countries. The basic organizational Arrangements and Mechanisms structure of the GMS Program is shown in Figure 3.

GMS The Leaders’ Summit sets the vision and principal directions of economic cooperation in the GMS. The Ministerial Existing Institutional Arrangements. The GMS Program Conference reviews and approves strategies and action has been pursued through an institutional arrangement plans in the sectors and areas of GMS cooperation, receives consisting of the (i) GMS Leaders Summit at the political and deliberates on progress reports on the implementation level, (ii) ministerial conference supported by the Senior of these strategies and action plans, and considers policy Officials’ Meeting (SOM) at the policy level, and (iii) sector and implementation issues requiring high-level resolution forums and working groups at the project and operational and related matters brought to its attention. The SOM, levels. The national inter-ministerial committee, assisted by which reports to the Ministerial Conference, provides the national secretariat, coordinates GMS Program activities overall coordination to the GMS forums and working

institutional coordination and links 53 groups, reviews and endorses the recommendations of these To promote and integrate the role of the private sector in the forums and working groups to the Ministerial Conference, development of the subregion, the GMS Business Forum and brings policy and related implementation issues to the (GMS-BF) was established in 2000, with a secretariat based attention of the Ministerial Conference. The GMS forums in Vientiane, the Lao People’s Democratic Republic (Lao and working groups act as the coordinator and facilitator PDR). The GMS-BF is an independent, multi-country of subregional initiatives in their respective sectors and nongovernment organization and a joint initiative of the areas of cooperation. More specifically, they coordinate chambers of commerce of the GMS member countries. the formulation of sector strategies and action plans, It is an important element in integrating the role of the identify priority subregional initiatives, prepare and submit private sector into the GMS Program, and in promoting, progress reports, and facilitate the resolution of issues in the facilitating, and catalyzing cross-border investment, as well implementation of these initiatives. as investment from nonmember countries in the GMS. Its tasks include (i) fostering closer relations and cooperation All GMS organizational bodies are responsible to the GMS among private sector organizations in the GMS member leaders. GMS summits are held every 3 years, with the countries; (ii) representing the private sector in GMS first in 2002; ministerial conferences are held yearly and meetings and conferences; (iii) promoting domestic and the SOMs are held twice a year. Hosting and chairing foreign direct investments in the GMS member countries; of the summit and other meetings is by alphabetical (iv) advocating policies, regulations, and systems and rotation of the GMS member countries. The sector forums procedures conducive to private sector investments; and and working groups, which meet at least once a year, (v) identifying and compiling business opportunities include the Subregional Transport Forum, Subregional and information in the GMS member countries and Telecommunications Forum, Subregional Energy Forum, disseminating to private sector organizations and entities. Subregional Trade Facilitation Working Group, Tourism Working Group, Working Group on Environment, The GMS-BF has organized fee-based conferences and high Working Group on Human Resource Development, and level public–private sector consultation meetings. It has set Subregional Investment Working Group. The Working up a GMS website and compiled a business handbook and Group on Agriculture was established in 2003 in directory of small and medium-sized enterprises (SMEs) in recognition of the need to include agriculture as one of the the GMS. In 2006, the board of the GMS-BF was expanded areas of cooperation in the GMS Program. to include corporate members representing multinational companies operating in the GMS. The GMS-BF has also At the national level, a minister and senior official or established working groups to promote and facilitate trade national coordinator have the primary responsibility and investment in the GMS member countries, especially of coordinating GMS activities in each GMS member along the GMS economic corridors. The most active is the country. These officials do not necessarily come from the GMS Trade and Transport Facilitation Working Group same ministry, although this has generally been the case (GMS-BF TTF), which reviews the business environment in the People’s Republic of China (PRC), Myanmar, and and tracks progress in implementing the customs transit Viet Nam. Table 18 shows the designated GMS minister system in all GMS economic corridors. The GMS-BF TTF and national coordinator in each GMS member country. also prepared the ground for the organization of the GMS

Table 18: GMS Ministers and National Coordinators

Country GMS Minister National Coordinator Cambodia Minister of Commerce Council for Development of Cambodia China, People’s Republic of Minister of Finance International Department, Ministry of Finance Lao People’s Democratic Republic Minister in Government Office Prime Minister’s Office Myanmar Minister of National Planning and Economic Foreign Economic Relations Department, Ministry Development of National Planning and Economic Development Thailand Minister to the Prime Minister’s Office National Economic and Social Development Board Viet Nam Minister of Planning and Investment Foreign Economic Relations Department, Ministry of Planning and Investment GMS = Greater Mekong Subregion. Source: GMS Secretariat.

54 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Freight and Transport Association, which is in the process identify gaps in implementing strategies and action plans, of being formally established. The other GMS-BF working and propose actions to resolve implementation issues; and group, which covers investment and finance, is supporting (iv) help increase the involvement of local authorities and the revitalization of the GMS Subregional Investment communities, and expand the participation of the private Working Group and promoting SMEs finance. sector in economic corridor development. Figure 4 shows more comprehensively the GMS institutional framework To strengthen efforts to develop GMS economic corridors, at the national and subregional levels for the public and the Economic Corridors Forum (ECF) was organized in private sectors. 2008 to serve as the main advocate and promoter of GMS economic corridor development. Among its key tasks are Other bodies have also been constituted to support the to (i) provide a platform for strengthening cooperation GMS Program. The Mekong Tourism Coordination Office among areas in the GMS East–West Economic Corridor was established in 2005 to coordinate sustainable pro-poor (EWEC), North–South Economic Corridor (NSEC), tourism development projects in the GMS, and promote and Southern Economic Corridor (SEC); and among the GMS as a single travel and tourism destination. Based the GMS forums and working groups; (ii) serve as a in Bangkok, Thailand, it serves as the secretariat of the venue for networking and sharing of information and GMS Tourism Working Group, taking over the functions views among central and local officials, businesspersons, of the previously constituted Agency for Coordinating and international agencies on strategies, approaches, Mekong Tourism Activities. The Environment Operations programs, and projects to accelerate economic corridor Center (EOC) was established in early 2006 to serve development; (iii) discuss the implementation of strategies as the information and knowledge clearing house for and action plans for economic corridor development, environmental management in the GMS, and is responsible

Figure 4: GMS Organizational Framework

National Subregional

Public Sector Private Sector Public Sector Private Sector

Head of Government Leaders’ Summit

Minister Chamber of Responsible Commerce and for GMSa Industry (CCI) Ministerial-level Economic Conference Corridors GMS Business Forum Forum

Senior Official/ Governors National Forum Coordinator GMS Senior Officials’ Secretariat Meeting

Concerned Minister/ Agencies Forums and Working Groupsb

Provincial Provincial CCIs Governments GMS-BF Chaptersc

a Deputy Prime Minister in certain cases. b Forums and working groups could adopt respective work programs focusing on the GMS priority corridors. c Proposed. GMS = Greater Mekong Subregion, GMS-BF = GMS Business Forum. Source: GMS Secretariat.

institutional coordination and links 55 for the timely and effective implementation of the GMS the program, and strengthen the effectiveness of Core Environment Program (CEP). EOC also serves as the the existing mechanisms and arrangements.”52 secretariat of the GMS Working Group on Environment (WGE); its tasks include organizing WGE meetings, It recommended the following: coordinating WGE activities, and reporting to the WGE on the progress of various CEP activities. (i) further strengthen the capacity of national focal points for coordinating subregional cooperation activities; Other supporting mechanisms include the National (ii) maintain the existing institutional arrangements, Transport Facilitation Committee, which coordinates, while strengthening the GMS Secretariat and monitors, and evaluates the implementation of the enhancing ADB’s coordinating and advisory role, and Cross-Border Transport Agreement (CBTA) for the having GMS countries assume more responsibility for incorporation of its provisions into the national legal coordinating the work of GMS forums and working and regulatory framework of each country. Further, the groups where there is willingness and capacity, as well committee promotes the integration of CBTA provisions as consensus among the GMS countries; into the logistics operations of the private sector. Another (iii) where feasible, establish separate secretariats for mechanism is the GMS Development Partners Meeting, forums and working groups in GMS countries which brings together about 60 participating development similar to the arrangements in the WGE and Tourism partners covering bilateral and multilateral organizations Working Group, with the GMS countries assuming and the private sector. It provides a venue for dialogue responsibility and support to forums and working with the GMS member countries and ADB on the GMS groups on a phased-basis; Program. Since the inception of the GMS Program, ADB (iv) continue the practice of holding meetings of the has been the designated GMS Secretariat providing full forums and working groups at the ministerial level secretariat services in close collaboration with the GMS when the agenda warrants, so that the direction and national coordinators of the member countries. mandate for action at the sector level can emanate directly from a high political level in the GMS The GMS follows an informal, pragmatic, and results- countries; oriented approach in its operations and activities. It builds (v) improve coordination and interaction among GMS on earlier gains and growing confidence among its members forums and working groups to promote cross-sector to bring subregional economic cooperation to a higher linkages and achieve synergies through (a) cross- level. Decisions are made by consensus, but initiatives that attendance in closely related meetings of forums involve only two or more GMS member countries can and working groups, (b) presentation of an overall be implemented following the “6-x” principle—if two or progress report on GMS activities during the meetings more GMS member countries agree to undertake a project, of the forums and working groups, (c) preparation then such project could proceed as a GMS initiative. Over and circulation of annual reports by the forums and time, GMS officials have developed a network of personal working groups, and (d) improvement of the flow of relationships that cut across countries and sectors, thus information and increase in communication among facilitating decision-making even in the case of difficult the forums and working groups; and issues. (vi) examine how GMS institutional arrangements should evolve in the next 10 years, taking into account Issues and Constraints. The 2007 Midterm Review of the the experience of other subregional and regional GMS Strategic Framework (GMS-SF),51 in its assessment cooperation initiatives, e.g., Should the flexible, of the GMS institutional arrangements and mechanisms, informal arrangements in the GMS be continued, or concluded that the existing “arrangements have provided should the program or parts of it move progressively an adequate administrative framework for implementing toward a more structured framework? How should the GMS-SF. They are flexible, simple, and generally the GMS Secretariat be eventually constituted and effective in supporting the pragmatic, activity-driven, and where should it be located? What should be the GMS results-oriented approach of the GMS Program. While Program’s interface with ASEAN? no major changes are necessary in the short term, certain adjustments in the GMS institutional framework need to consider the changing context of the GMS Program, increase the role of GMS countries in implementing

51 ADB. 2007. Midterm Review of the Greater Mekong Subregion Strategic Framework (2002–2012). Manila. 52 The latter point was reiterated in the GMS Strategic Framework for 2012–2022.

56 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt As regards the GMS-BF, the midterm review of the GMS Multisector Investment Framework to carry forward the Strategic Framework recommended the following: new GMS strategic framework calls for a greater role for the ECF, being the only multisector platform in the GMS (i) further strengthen the GMS-BF’s advocacy role for Program.54 policy and regulatory reforms; (ii) look into the possibility of regularizing the membership of GMS-BF in the Trade Facilitation Working Group IMT-GT and the Subregional Investment Working Group to institutionalize public–private cooperation in Existing Institutional Arrangements. The existing trade and investment promotion, provide a venue institutional structure of IMT-GT consists of national and for following up on actions needed, and help in subregional mechanisms in the public and private sectors identifying practical and realistic approaches; and (Figure 5).55 At the national level, a minister and a senior (iii) continue to mobilize funds from the private sector official have the responsibility of coordinating IMT-GT and establish mechanisms to make the operations activities. The IMT-GT minister and senior official in of the GMS-BF self-sustaining over the longer- Indonesia are from the Coordinating Ministry of Economic term, being supported by ADB and the Economic Affairs (CMEA). The IMT-GT ministers in Malaysia and and Social Commission for Asia and the Pacific and Thailand are from their respective Prime Minister’s Office. supplemented by income from the organization of The senior official for Malaysia is from the Economic fee-based conferences. Planning Unit (EPU); for Thailand, the senior official is from the National Economic and Social Development Actions have been taken on some of these recommendations, Board (NESDB). The IMT-GT ministers and senior but a few others remain to be acted upon.53 For instance, officials are supported by their national secretariats: CMEA to strengthen national coordinators’ offices, the GMS in Indonesia, EPU in Malaysia, and NESDB in Thailand. Secretariat met with the national focal points in the GMS countries in 2008 and 2009 to improve coordination and The IMT-GT mechanism at the subregional level has working arrangements, and identify training needs. The a multi-tiered structure consisting of working groups, GMS countries expressed a desire to hold these consultations senior officials, and ministerial level meetings, in addition annually to follow up on previous agreements, and discuss to an annual summit of the IMT-GT leaders on the current and emerging issues involving the coordination and sidelines of the annual internal ASEAN summit. There administration of the GMS Program. are six working groups56 corresponding to each area of cooperation: (i) agriculture, (ii) halal products and services, Moreover, all GMS forums and working groups, except (iii) human resource development, (iv) tourism, (v) trade the ones on trade and investment, have taken steps to and investment, and (vi) transport and infrastructure. The sharpen the focus of their work and make their activities working groups represent the basic working unit of the more effective, including further prioritization of planned IMT-GT where new project proposals are vetted, ongoing projects and preparation of strategies and work plans to projects are monitored, and project implementation issues guide their activities. The Working Group on Human are resolved. Resource Development was restructured in line with the new GMS Human Resource Development Strategy and The Senior Officials Meeting (SOM) is the subregion-wide Action Plan it prepared. Separate secretariats for the GMS body that coordinates and provides oversight to the working forums and working groups similar to the Tourism Working groups to ensure that projects and activities are consistent Group and the WGE have not yet been established. The with the goals of IMT-GT. It reports to the Ministerial GMS Program’s interface with ASEAN is being addressed Meeting and provides the substantive direction to projects by this study. and activities in-between ministerial meetings. Since 2008, the SOM has convened a planning meeting in the first With the operationalization of the new Greater Mekong quarter of every year to review summit directives and the Subregion Economic Cooperation Program Strategic Framework (2012–2022), which is centered on a multisector approach 54 This was discussed during the 4th GMS Economic Corridors Forum held on 26 July to further pursue corridor development, implications to 2012 in Mandalay, Myanmar. the GMS institutional structure and its stakeholders need 55 ADB. 2010. Draft Report: Report of the Eminent Persons on the Business Process Review to be considered. The ongoing preparation of the Regional of the IMT-GT. Manila. 56 In 2006, the working groups replaced the “implementing task groups” on trade and in-situ development, open market operation, cross-sectoral development, 53 ADB. 2010. Midterm Review of the Greater Mekong Subregion Strategic development of the hinterland and intra-trade, infrastructure development, Framework: A Retrospective. Unpublished. and tourism.

institutional coordination and links 57 Figure 5: IMT-GT Institutional Framework

National IMT-GT

Heads of Government Leaders’ Summit

Public Private Public Private

Joint Buisness Ministerial Joint Buisness Signing Minister Councils (JBC) Meeting Councils (JBC)

Secretariat Secretariat

Senior Officials’ Senior Official Meeting

Secretariat

Concerned Working Groups Government JBC WGs (WGs) Agencies Sub-WGs

Provincial or State Provincial or State Governments Chambers of Governors’ Forum Commerce

Reporting responsibilities Coordinating arrangements

IMT-GT = Indonesia–Malaysia–Thailand Growth Triangle. Source: Centre for IMT-GT Subregional Cooperation (http://www.imtgt.org/structure.htm).

measures needed to carry them out. The SOM also holds in IMT-GT development. Coordination between the a preparatory meeting prior to the Ministerial Meeting, concerned line ministries, provincial or state authorities, and holds special SOMs when necessary to consider urgent and JBC is done mainly through the national secretariat, matters to be acted upon or brought to the attention of SOM, and ministerial level structures. The national the Ministerial Meeting. The Ministerial Meeting convenes secretariat serves as the focal point for coordination. at least once a year. It is the second highest coordinating, direction-setting, and decision-making body in the Participating provinces and states are expected to be IMT-GT. It is the mechanism for formally reporting to the involved in the planning and programming of public Leaders Summit on the progress of initiatives under the investments, and in facilitating the implementation of program, and for deliberating on attendant issues. projects in their respective areas. The Chief Ministers and Governors Forum (CMGF) serves as the promoter and The Joint Business Council (JBC) serves as the private sector facilitator of IMT-GT projects in their respective areas. The counterpart of the governmental IMT-GT institutions. It CMGF has been active only in recent years as a forum for has a parallel set of working groups operating in the six discussing project updates, new project ideas, and business areas of cooperation in the IMT-GT. The national JBCs opportunities. convene regularly at the subregional level to foster closer relations and cooperation among various business interests The Centre for IMT-GT Subregional Cooperation (CIMT) in the IMT-GT, and serve as an advocate for improving serves as the secretariat of the IMT-GT. It was established the enabling environment for private sector participation in accordance with the decision taken at the 2nd IMT-

58 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt GT Summit held in Cebu, Philippines in January 2007 to targets; expected benefits; and, most importantly, set up a coordinating and monitoring mechanism for the accountability for implementation. In many cases, the status IMT-GT. The CIMT was officially established in August of project implementation cannot be easily ascertained. 2007 under sponsorship of the Government of Malaysia. Little is known after projects have been listed in the working The CIMT, which is based in Putrajaya, Malaysia, has group’s action plan, with issues identified sometimes being been accorded the status of international organization. left unresolved. Within ministries, the sense of ownership is Its principal tasks are to (i) facilitate coordination and highly uneven, as reflected in the working group activities consultation among IMT-GT institutions; (ii) facilitate, and outputs. Some working groups lack continuity, with monitor, and evaluate the implementation of priority high rates of turnover in individuals representing specific projects and agreements; (iii) promote relations with ministries at their meetings. A system of focal points in potential investors and donors; and (iv) develop databases the ministries sitting in the working groups has also not of IMT-GT activities and disseminate information on been established. A bigger information gap exists for JBC IMT-GT within and outside the subregion. The CIMT projects. The roadmap project list is composed mostly provides support to the national secretariats in preparing of public sector initiatives, notwithstanding claims of and organizing the Leaders’ Summit, Ministerial Meeting, IMT-GT being private-sector-led. It is also difficult to SOMs, and working group meetings. It also assists in ascertain systematically (i) what and how many activities are monitoring and coordinating follow-up actions with going on through JBC, except through its meeting reports; IMT-GT member governments and their respective and (ii) which among these activities are discrete projects, ministries and agencies. The CIMT acts as a focal point or simply spin-offs from business networking activities. for interaction with external parties, including potential investors, donor agencies, and development partners. ADB Part of the weaknesses in the project formulation and has been a development partner of IMT-GT since 2006. monitoring function of IMT-GT institutions can be traced to the limited resources and capacity of the CIMT and the Issues and Constraints. The Mid-term Review of the national secretariats. The Intergovernmental Agreement IMT-GT Roadmap for Development, 2007–201157 to make the CIMT fully operational has encountered concluded that only modest progress has been made in domestic legal issues, thus constraining the CIMT’s ability implementing the roadmap initiatives; this less-than- to fully perform its functions. The CIMT lacks the stature satisfactory implementation of the roadmap reflects and resources to attract staff with the requisite knowledge fundamental weaknesses in structures, capacities, and and skills that could provide technical and advisory support processes of IMT-GT cooperation. Some of the weaknesses to the participating governments. The national secretariats highlighted in the roadmap included the need to (i) sharpen also have limited staff and are faced with competing the policy focus of ministerial-level meetings; (ii) strengthen priorities. In some cases, they do not have clear and specific the project formulation, monitoring, and coordination mandates. The capacity of the national secretariats needs to functions of the SOM, national secretariat, and CIMT; be strengthened in terms of staffing, skills, and resources and (iii) intensify the policy and advocacy role of JBC. The to support the senior officials in their monitoring and slow progress of cooperation in the IMT-GT has also raised coordinating function, and the Ministerial Meeting in its doubts over whether the current institutional arrangements direction-setting role. There is a need for a regular platform are suitable to a private-sector-led program such as IMT- that would enable JBC and IMT-GT officials (national and GT. The public–private sector interface remains weak; local) to discuss policy issues at the national level before hence, the energy and dynamism of the private sector these are elevated to subregional level discussions. This continues to be underutilized. national level platform could serve as a forum for dialogue, and a clearinghouse of policy issues that need to be raised Moreover, the current IMT-GT structure accentuates at the tripartite level. a central-ministry-driven program, as reflected in the composition of the working groups. The local governments The Mid-term Review of the IMT-GT Roadmap for are inadequately mainstreamed into the decision-making Development, 2007−2011 concluded that the strategic process both at the program and project levels. Project thrusts of the roadmap remained relevant, and that the accountability within the IMT-GT institutional structure principal gap is in project implementation. The review needs to be improved. Poorly conceived projects proliferate observed that the Action Plan Matrix supporting the in the working groups’ portfolio, which provides little roadmap had to be translated into results to realize the information on the project’s scope and rationale; measurable benefits from cooperation under the IMT-GT program. In particular, the review stressed the need for a more disciplined 57 ADB. 2010. Mid-term Review of the IMT-GT Roadmap for Development 2007−2011. and well-informed process for identifying project-based Manila. sector strategies, clear accountability for project outputs,

institutional coordination and links 59 monitoring based on results, and an action-oriented BIMP-FC was established in 2004 in Kota Kinabalu, implementation blueprint to succeed the roadmap. Thus, Sabah, Malaysia; its task is to coordinate the different the idea of formulating an implementation blueprint was BIMP-EAGA institutions, including the (i) national discussed at the 17th Senior Officials’ Meeting/Ministerial secretariat through regular meetings, and (ii) clusters and Meeting in Krabi, Thailand in August 2010, which also working groups through coordination or “convergence” endorsed the sector strategies that resulted from the mid- meetings and the dissemination of reports on the activities term review process. These strategies served as the basis for of the clusters and working groups. It is also responsible streamlining and identifying programs and projects for the for facilitating the implementation of projects by following IMT-GT Implementation Blueprint, 2012–2016, which was up on actions required to resolve issues and organizing approved by the 8th IMT-GT Summit on 4 April 2012.58 critical follow-on meetings. As secretariat for the SOM and Ministers’ Meeting, the BIMP-FC provides technical The IMT-GT implementation blueprint clearly manifests and logistical support in preparation for their meetings. the resolve and commitment of the member countries Regular reporting by BIMP-FC is expected to keep the to an action-oriented and results-based approach to senior officials informed about implementation issues IMT-GT development in the next 5 years. However, its facing priority BIMP-EAGA projects. It serves as a focal successful implementation requires stronger and more point for coordination with external partners, such as the focused institutional mechanisms. Along this line, the governments of the People’s Republic of China (PRC) and IMT-GT implementation blueprint defines more clearly Japan, the ASEAN Secretariat, ASEAN−Japan Centre, the accountability of chairs of working groups, national Economic Research Institute for ASEAN and East Asia secretariats, CIMT, and other bodies, emphasizing (ERIA), and GTZ.60 ADB has served as BIMP-EAGA’s the important role of the line ministries and national regional development advisor since its appointment secretariats. They need to assume a greater role in appraising in 2001. projects, advising on project concepts, and implementing a results-based monitoring system. The main responsibilities of the national secretariat are to (i) ensure appropriate representation and active participation of both national and local stakeholders in BIMP-EAGA subregional cooperation activities, and (ii) monitor and facilitate the implementation of priority projects. In- Existing Institutional Arrangements. A new institutional country consultation, dialogue, and feedback mechanisms structure for BIMP-EAGA was scheduled to be effected are at the core of these activities. The agencies presently in January 2013. However, to provide the context and designated as national secretariats in BIMP-EAGA are rationale of the changes to be made, the institutional the Ministry of Foreign Affairs and Trade for Brunei structure in place up to the end of 2012 is first discussed. Darussalam, Coordinating Ministry for Economic Affairs (CMEA) for Indonesia, Economic Planning Unit (EPU) The existing BIMP-EAGA institutional structure is under the Office of the Prime Minister supported by the similar in many respects to the IMT-GT organizational state economic planning units of Sabah and Sarawak for set-up (Figure 6).59 At the top of the structure is the Malaysia, and Mindanao Development Authority under Leaders’ Summit (held on the sidelines of the annual the Office of the President for the Philippines. ASEAN Summit) and immediately below it, the Ministers Meeting, and then the Senior Officials’ Meeting (SOM). A Local government participation is slowly but progressively secretariat at the national and subregional levels, called the being addressed with the holding of the chief minister, BIMP-EAGA Facilitation Centre (BIMP-FC), supports governors, and heads of LGF meeting for the third time. and assists in coordinating BIMP-EAGA activities. There The LGF serves as a venue for dialogue among local is also a Local Government Forum (LGF), which is similar government leaders in BIMP-EAGA about their roles to the Chief Ministers and Governors Forum of IMT-GT, in promoting cooperative activities that support their and a parallel private sector organization, the BIMP-EAGA respective economic development agenda. The LGF Business Council (BEBC). However, unlike IMT-GT, technical working committee, which met in January there are “clusters” in BIMP-EAGA under whose wing one 2008, agreed that local governments’ participation would or more working groups operate. be effected and enhanced within the existing working group mechanisms in the countries. However, there are weaknesses in these mechanisms that have constrained

58 CIMT. 2012. IMT-GT Implementation Blueprint 2012–2016. Putrajaya. 59 ADB. 2010. Draft Report: BIMP-EAGA Institutional Structures and Cooperation Mechanisms Review and Assessment. Manila. 60 GTZ assistance ended on 30 June 2011.

60 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Figure 6: BIMP-EAGA Institutional Structure

In-country Subregional Private Sector

Minister Ministers’ Meeting

Senior Officials Meeting Senior Official BEBC

BEBC National Secretariat BIMP-FC Secretariat

Focal Organizations

In-Country Working Group Stakeholders Clusters (4)

Reporting Coordination

ASEAN = Association of Southeast Asian Nations, BEBC = BIMP-EAGA Business Council, BIMP-EAGA = Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area, BIMP-FC = BIMP-EAGA Facilitation Centre. Source: BIMP-EAGA http://www.bimp-eaga.org.

the participation of local governments, and more in Figure 7. Although this appears to have reduced the efforts are needed to enable them to play a larger role in number of working groups in the overall organizational BIMP-EAGA activities. structure of BIMP-EAGA, it effectively added another layer to the already large number of working groups, The clustering of the working groups came about as a further complicating the task of coordination within and response of the SOM to the recommendation of the 2004 across sectors and subsectors. study to reduce the number of working groups,61 either by deactivating or consolidating related working groups. The The Transport, Infrastructure, and ICT Development SOM decided that the working groups should decide their (TIICTD) Cluster is responsible for facilitating connectivity relevance and contribution to the goals of BIMP-EAGA, within the subregion through working groups for air, land, thus leaving the decision whether to continue or cease and sea transport, and information and communication operation to the working groups. To improve coordination technology. The Joint Tourism Development (JTD) Cluster within the priority areas of cooperation, the SOM decided consists of only one working group, which principally to organize related working groups into clusters as shown involves the respective ministries of tourism of four ASEAN Member States. Thus, coordination within the 61 ADB. 2004. Draft Report. BIMP-EAGA: Review of Structure and Institutional JTD Cluster is straightforward. Besides the JTD Cluster, Mechanisms. Manila. Unpublished. the TIICTD Cluster appears to be the most cohesive of the

institutional coordination and links 61 Figure 7: BIMP-EAGA Clusters

TIICTD NRD JTD SMED CIQS

Air Agro-Industry Tourism KFFS Customs

Land Fisheries Devt. CCM Immigration

Sea Energy Quarantine

Environment ICT Security and Forestry

ASEAN = Association of Southeast Asian Nations; BIMP-EAGA = Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area; CCM = Construction and Construction Materials; CIQS = customs, immigration, quarantine, and security; Devt = development; ICT = information and communication technology; JTD = Joint Tourism Development; KFFS = Capital Formation and Financial Services; NRD = Natural Resource Development; SME = small and medium-sized enterprises; SMED = SME Development; TIICTD = Transport, Infrastructure, and ICT Development. Source: BIMP-EAGA http://www.bimp-eaga.org.

clusters because sectors represented by the working groups trade facilitation, which is a critical aspect of regional fall within the jurisdiction of just one or two national cooperation and integration. The CIQS Task Force is ministries or agencies. The Natural Resource Development composed of four sectors and four subsectors under the (NRD) Cluster is responsible for the development of quarantine sector (human, plants, animals, and fish). A agriculture and fisheries, as well as the shared development BIMP-EAGA member country is designated to take the and joint management of common natural resources. lead in the activities of the clusters: Brunei Darussalam It is the least homogenous among the working groups for the TIICTD Cluster, Indonesia for the NRD Cluster, because the sectors represented in the cluster are under the Malaysia for the JTD Cluster, and the Philippines for the supervision of several national agencies. This has resulted in SMED Cluster and CIQS Task Force. many coordination issues among agencies at the national level and between national agencies and local stakeholders. The private sector has an independent structure at the subregional and country levels. At the national level, the The main functions of the Small and Medium-Sized BEBC focal organizations are responsible for organizing Enterprises (SMEs) Development (SMED) Cluster are to consultation meetings with their respective members on (i) facilitate the development of an appropriate enabling issues involving cross-border trade and investment. The environment for cross-border trade and investment; and BEBC’s predecessor, the East ASEAN Business Council (ii) help address the needs of SMEs, which comprise the (EABC), was perceived to have catered to the needs of big large majority of private business in BIMP-EAGA. It has business rather than those of the BIMP-EAGA business two working groups: Capital Formation and Financial community made up largely of micro and small businesses, Services (KFFS) and Construction and Construction and a sprinkling of medium-sized enterprises. Thus, the Materials (CCM), both of which have been inactive. The BIMP-EAGA private sector welcomed the restructuring Customs, Immigration, Quarantine, and Security (CIQS) of BEBC in 2004 to cater to the needs of the SMEs. The Task Force was formerly under the SMED Cluster, but change from EABC to BEBC, however, did not produce was spun off as an independent unit in 2007. However, the intended results and failed to increase and broaden its it has remained as a task force and has not been upgraded membership. to a cluster or working group, even though it deals with

62 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Issues and Constraints. The BIMP-EAGA Roadmap (iii) inadequate monitoring mechanisms for programs, to Development, 2006–2010 was formulated following projects, and activities, requiring the establishment of the agreement reached at the 12th SOM/9th Ministers a system for tracking progress and results; Meeting in Balikpapan, Indonesia in November 2004 (iv) infrequent meetings of working groups,64 lack to prepare the roadmap. The roadmap identified broad of continuity, and low level of participation in strategic thrusts for the subregion and targets for clusters working group meetings and activities, requiring an and sectors that would guide the implementation of BIMP- improvement in their management and operations and EAGA projects and activities. In October 2010, the 15th the appropriate level and continuity of representation Ministers Meeting decided that since the strategic thrusts in their meetings and activities; of the roadmap were still relevant and valid, the successor (v) dwindling participation of the private sector in document should cover 2012–2016. The blueprint would BIMP-EAGA activities, requiring strengthening focus on project implementation, which is essential in of BEBC’s organization and operations and closer achieving concrete results and realizing the subregional engagement with national and local chambers of program’s objectives. The implementation blueprint has commerce and industry associations; and been specifically designed to strengthen project preparation (vi) weak substantive preparations for high level meetings and implementation, and enhance the achievement of (SOM, Ministers Meeting, and Summit), requiring the strategic thrusts of the roadmap. The BIMP-EAGA the strengthening of the capacity and mandates of the Implementation Blueprint, 2012–2016 was approved by the national secretariat, BIMP-FC, and working groups. 8th BIMP-EAGA Summit in April 2012.62 To ensure the delivery of the BIMP-EAGA implementation The operationalization of the BIMP-EAGA implementation blueprint goals and accelerate BIMP-EAGA cooperation, a blueprint requires concomitant strengthening of the new organizational structure was approved by the Special institutional mechanisms and arrangements for managing SOM in Jakarta on 28–29 February 2012 (Figure 8) and the subregional program. In this regard, the 2010 review included in the blueprint as adopted. The new structure and assessment of these mechanisms and arrangements revolves around the strategic pillars of the implementation concluded that: “In general, the assessment shows blueprint and their key components to ensure closer that current subregional institutional frameworks and coordination and greater synergy among related projects. mechanisms are effective only as far as consultations and It more clearly delineates the policy-making and dialogue among member countries are concerned. The direction-setting bodies, and program or sector bodies structures and mechanisms, however, are not ideal for that are responsible for formulating and implementing the implementation or for the monitoring of the progress projects under the implementation blueprint. The roles, of identified flagship and priority projects. Reforms, if responsibilities, and accountabilities of the clusters and adopted, should directly address the need to accelerate working group chairs have also been more clearly defined. project implementation, particularly projects that support The Summit, Ministers Meeting, and SOM will continue the twin goals of establishing BIMP-EAGA as a regional to be the policy-making and direction-setting bodies food basket and promoting the subregion as an ecotourism supported by the national secretariats and BIMP-FC. destination.”63 It identified several issues and constraints The Ministers Meeting is responsible for coordination to be addressed to increase the effectiveness of the BIMP- with participating provinces and states through the LGF, EAGA institutional arrangements, including the following: while the SOM is responsible for coordination with the private sector through BEBC. Improvements in business (i) cumbersome institutional framework with too many practices are further expected to address the weaknesses clusters and working groups, requiring a major previously discussed. effort to rationalize and streamline its organizational structure and sharpen the focus of its working groups; The delay in the signing of the agreement for the (ii) lack of clear implementation mechanisms for programs establishment of BIMP-FC, which would formalize and and projects identified by the working groups, legalize its status, has constrained the BIMP-FC from requiring an improvement in project identification, performing its tasks effectively. The lack of a legal status development, and implementation process; has prevented the BIMP-FC from hiring technical staff to increase its capacity to provide technical support to the

62 BIMP-FC. 2012. BIMP-EAGA Implementation Blueprint, 2012–2016. Kota 64 The situation was the opposite in the earlier years of BIMP-EAGA when there were Kinabalu. too many meetings “taking a toll on resources and time of participants.” ADB. 2008. 63 ADB. 2010. Draft Report. Subregional Institutional Structures and Cooperation Draft Report: BIMP-EAGA Review of Institutional Structures and Mechanisms. Mechanisms: Review and Assessment. Manila. Unpublished. Manila. Unpublished.

institutional coordination and links 63 Figure 8: BIMP-EAGA Revised Institutional Structure (Effective 1 January 2013)

Brunei Darussalam BIMP-EAGA Indonesia Strategic, Policy, BIMP Leaders Guidance, and Malaysia Administration Philippines Sectoral MM (yet to be covered) MM Local Govt Forum Agriculture Transport Other Relevant Ministries and Fisheries MM MM 80 M BEBC BIMP Line Ministers BIMP Line Ministers BIMP M8 BIMP-FC

Connectivity Pillar Infrastructure Tourism Connectivity Pillar Monitoring

Pillar Unit Food Basket Basket Food Agri- Business Transport Trade and Power ICT Environment Infrastructure Infrastructure Tourism Cluster Cluster Investment Cluster Cluster Facilitation Cluster Cluster Cluster WG Air WB Sea Land CIQS

Fisheries WG SMED A gro-Industry WB WB WB

ASEAN = Association of Southeast Asian Nations; BEBC = BIMP-EAGA Business Council; BIMP-EAGA = Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area; CIQS = customs, immigration, quarantine, and security; FC = Facilitation Centre; govt. = government; ICT = information and communication technology; MM = ministers meeting; NS = national secretariat; SMEs = small and medium-sized enterprises; SMED = SME Development; SOM = senior officials’ meeting; WG = working group. Source: BIMP-FC. 2012. BIMP-EAGA Implementation Blueprint, 2012−2016. Kota Kinabalu.

clusters and working groups. Funds are available for hiring countries’ financial contribution to the BIMP-FC through staff, but there is no mechanism for entering into contracts an appropriate mechanism, in addition to providing some with them. The BIMP-FC’s core staff is still provided by co-financing.65 At present, one project staff of the BIMP- the Sabah State Economic Planning Unit (SEPU) under an FC is engaged under an ADB TA project. In addition, arrangement where the Sabah Government shoulders the ADB and GTZ have previously provided consultants to salaries and other benefits of the head of BIMP-FC, one assist the BIMP-FC on specific technical issues, but these administrative staff, and one driver. SEPU has repeatedly arrangements were for short periods only. requested a decision on the signing of the establishment agreement, and has made known their intention to pull out their staff at the earliest possible time. Despite this development, there has been no consideration of short- term, interim, or alternative measures to address the issue on organizational strengthening of the BIMP-FC. But the BIMP-EAGA ministers, during their Ministers Meeting in October 2011, requested ADB to help address the issue and take an increasing role in supporting the 65 Following the request, ADB consulted member countries on the scope and content of the proposed technical assistance (TA). The concept paper on the proposed TA BIMP-FC. A technical assistance (TA) is being developed, was approved by ADB Management on 26 July 2012 and tabled during the Special under which ADB would serve as the conduit of member SOM on 26 July 2012 in Manila. Further in-country consultations are ongoing.

64 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Table 19: Sector Bodies and Sectors under the ASEAN Community Councils ASEAN Political-Security Community ASEAN Economic Community Council ASEAN Socio-Cultural Community Council Council • ASEAN Ministerial Meeting • ASEAN Economic Ministers • Culture and Arts • ASEAN Regional Forum • ASEAN Free Trade Area • Disaster Management • Defence • Energy • Education • Law • Food, Agriculture, and Forestry • Environment • Transnational Crime • Finance • Haze • Investment • Health • Minerals • Information • Mekong Basin Development Cooperation • Labor • Transport • Rural Development and Poverty Eradication • Telecommunications and Information • Science and Technology Technology • Social Welfare and Development • Tourism • Women • Youth Source: ASEAN Secretariat http://www.asean.org/index2008.

ASEAN of the ASEAN community councils to the Summit, and considers the annual report of the Secretary-General on Existing Institutional Arrangements. The principal the work of ASEAN and the ASEAN Secretariat. It also components of the organizational structure of ASEAN,66 coordinates with the ASEAN community councils— based on the ASEAN Charter that came into force in AEC, APSC, and ASCC—to ensure consistency among 2008, are the following: (i) ASEAN Summit; (ii) ASEAN their respective activities. The ASEAN community Coordinating Council (ACC); (iii) ASEAN community councils ensure that the relevant decisions of the ASEAN councils corresponding to the three pillars of the ASEAN Summit are implemented, coordinate the work of the Community: ASEAN Political-Security Community various sectors under their purview, and submit reports (APSC) Council, ASEAN Economic Community (AEC) and recommendations to the ASEAN Summit on their Council, and ASEAN Socio-Cultural Community respective areas of responsibility. The ACC and community (ASCC) Council; (iv) ASEAN sector ministerial bodies councils meet at least twice annually. under the APSC, AEC, and ASCC councils; (v) Secretary- General of ASEAN and ASEAN Secretariat; (vi) ASEAN The ministerial bodies and sectors under each ASEAN national secretariats; and (vii) Committee of Permanent community council are shown in Table 19. They are Representatives (CPR) to ASEAN. responsible for implementing the agreements and decisions of the ASEAN Summit under their respective spheres. The ASEAN Summit, which comprises the Heads of The main organ under the AEC Council is the ASEAN State or Government of the ASEAN Member States, is economic ministers, the majority of whom are ministers the supreme policy-making body of ASEAN. It meets of commerce, trade, or industry in the Member States. twice every year,67 and is hosted by the member state The committees under the ASEAN economic ministers are serving as the ASEAN Chair. The ACC, comprising the listed in Appendix B. foreign ministers of the ASEAN Member States, prepares the meetings of the ASEAN Summit, coordinates the The functioning of ASEAN is supported by the ASEAN implementation of decisions of the Summit and the reports Secretary-General and ASEAN Secretariat at the regional level, and by the ASEAN national secretariats in each ASEAN Member State. The CPR, designated with the rank 66 The discussion in this section is based mainly on ADB (2011), ASEAN Secretariat of ambassador and based in Jakarta, supports the ACC, (2007), R. Severino (2009), and ASEAN Secretariat (http://www.aseansec.org). coordinates with the ASEAN national secretariats and other 67 The first ASEAN Summit was held in 1976 followed by those in 1977, 1987, 1992, and 1995, from which time it met annually until 2008. The biannual ASEAN ASEAN sector ministerial bodies, liaises with the Secretary- Summit meetings started in 2009. General of ASEAN and ASEAN Secretariat, facilitates

institutional coordination and links 65 Figure 9: Implementation Arrangements for the Master Plan on ASEAN Connectivity

ASEAN Summit

ASEAN Coordinating Council and ASEAN Community Councils

ASEAN Secretariat (Dedicated unit at the ASEAN Subregional arrangements Secretariat to be established) related to ASEAN Connectivity ASEAN Connectivity Coordinating Committee (Comprising the Permanent Representatives to ASEAN or any other special representatives appointed by respective ASEAN National Coordinators for ASEAN Sectotal Bodies Members states) Implementation

Coordination Reporting

ASEAN = Association of Southeast Asian Nations. Source: ASEAN Secretariat. 2010. Master Plan on ASEAN Connectivity. Jakarta.

cooperation with ASEAN external partners, and performs Centre. A list of the organizations under each of the sector other functions that may be determined by the ACC. The ministerial bodies of the APSC, AECC, and ASCC is chair of ASEAN is rotated annually in alphabetical order, contained in Appendix B. with the Member State serving as chair for a particular year assuming the chairs of all the principal ASEAN organs for In 2010, ASEAN adopted a special mechanism to ensure that year, including the ASEAN Summit, ACC, ASEAN the effective implementation of the strategies, policies, and community councils, sector ministerial bodies, and CPR. programs under the Master Plan on ASEAN Connectivity (MPAC). This includes the establishment of the ASEAN The main organs of ASEAN are complemented by a number Connectivity Coordinating Committee (ACCC), which is of supporting mechanisms, which include the ASEAN tasked with the overall coordination of the implementation Foundation, ASEAN Intergovernmental Commission on of MPAC initiatives. The ACCC, whose members are Human Rights, and special bodies for specific regional the permanent representatives to ASEAN of the ASEAN initiatives. The ASEAN Foundation is primarily concerned Member States, is assisted by national coordinators with promoting ASEAN awareness, people-to-people appointed by the ASEAN Member States and a dedicated interactions, and close collaboration among the various unit at the ASEAN Secretariat (Figure 9).68 stakeholders in the ASEAN Member States. Examples of special functional bodies, which are under the umbrella The ASEAN Member States serve as country coordinators of the relevant sector ministerial bodies, are the ASEAN for promoting ASEAN’s interests with dialogue partners. University Network, Centre for Biodiversity, Centre for Energy, Centre for the Development of Agricultural

Cooperatives, Coordinating Centre for Transboundary 68 ASEAN national secretariats have invariably been designated as the national coordinators for the MPAC implementation. The dedicated unit at the ASEAN Haze Pollution, Council on Petroleum, Earthquake Secretariat envisioned to support the ACCC has not yet been established as of the Information Centre, and Specialized Meteorological writing of this report.

66 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Table 20: ASEAN County Coordinators for Dialogue Partners Dialogue Partner ASEAN Member States 2006–2009 2009–2012 2012–2015 Brunei Darussalam People’s Republic of China (PRC) Euroepan Union (EU) India Cambodia EU India Japan Indonesia India Japan Republic of Korea Lao People’s Democratic Republic Japan Republic of Korea New Zealand Malaysia Republic of Korea New Zealand Russia Federation Myanmar New Zealand Russia Federation United States Philippines Russian Federation United States Australia Singapore United States Australia Canada Thailand Australia Canada PRC Viet Nam Canada PRC EU Source: ASEAN Secretariat http:// www.asean.org/index2008.

The country coordinator assignments with dialogue partners (i) coordinating the activities of ASEAN organs, and from 2006 to 2015 are shown in Table 20. No specific (ii) implementing ASEAN projects and initiatives. Since ASEAN member state has been designated as coordinator then, several amendments have been made to the 1976 of ASEAN relations with international organizations and Agreement on the Establishment of the ASEAN Secretariat institutions, and the ASEAN Secretariat now performs to make it more effective in performing its responsibilities, this role. Relations with international organizations and with most of the major changes made following the signing institutions are generally governed by specific agreements of the Common Effective Preferential Tariff Scheme for on working relationships and arrangements. An example ASEAN Free Trade Area in January 1992. The changes is the Memorandum of Understanding for Administrative included the following: Arrangements between ADB and the ASEAN Secretariat, which was signed in August 2006 an in effect until the end (i) providing flexibility in the size of the staff complement of December 2010. A new Memorandum of Understanding of the ASEAN Secretariat, which was fixed at nine in between ASEAN and ADB was signed on 4 April 2012 on 1976 and has progressively increased to 99 at present, the sidelines of the 20th ASEAN Summit in Phnom Penh, and professionalization of the ASEAN Secretariat staff Cambodia (Appendix C). through open recruitment; (ii) strengthening the mandate, authority, and status ASEAN does not have a single counterpart private sector of the Head of the Secretariat by re-designation of organization similar to the GMS Business Forum, IMT- the position from Secretary-General of the ASEAN GT Joint Business Council, or BIMP-EAGA Business Secretariat to Secretary-General of ASEAN with Council. Instead, it has several business affiliates covering ministerial rank, lengthening the tenure of office of the many sectors and subsectors, including the ASEAN Airlines Secretary-General from 3 to 5 years, and enhancing Meeting, ASEAN Automotive Federation, ASEAN Bankers the mandate of the Secretary-General to facilitate and Association, ASEAN Business Advisory Council, ASEAN monitor progress in the implementation of ASEAN Business Forum, ASEAN Chambers of Commerce and agreements; and Industry, ASEAN Chemical Industries Council, ASEAN (iii) increasing the number of Deputy Secretaries-General Pharmaceutical Club, ASEAN Tourism Association, and from one in 1976 to four at present, with two selected Federation of ASEAN Shippers’ Council. The complete list from among the nationals of ASEAN Member States of business associations affiliated with ASEAN is shown in based on alphabetical rotation for a nonrenewable Appendix D. term of 3 years, and two by open recruitment for a renewable term of 3 years. ASEAN Secretariat. The ASEAN Secretariat was set up in February 1976 in Jakarta, Indonesia, 9 years after The organizational structure of the ASEAN Secretariat ASEAN was established. Its basic function is to assist in is shown in Figure 10. The ASEAN Secretariat has four

institutional coordination and links 67 Figure 10: ASEAN Secretariat Organizational Structure

Secretary General

Executive Support Internal Audit and Strategic Planning and Division Evaluation Division Coordiantion Division

APSC Department AEC Department ASCC Department Community and Corporate Affairs Department

Macro- Finance. Socio- Cross- Community Corporate Political & External economic Market Industry & Cultural Sectoral Affairs Security Relations Integration Affairs and Finance Infrastructure Cooperation Cooperation Development Directorate Directorate Directorate Surveillance Directorate Directorate Division Division Directorate Office Research, HRD, Admin., Political External Trade Infrustracture Culture Environment Information, Protocol & Cooperation Relations Facilitation Division Information Division and Conference Division Division 1 Division Division Statistical Services Division Division Agriculture Education, Disaster AMPA, ASEAN Security External Services & Foundation, Finance Industries Youth & Mgt. & Cooperation Relations Investment & Natural Humanitarian AHRB, and Other & Budget Division Division 2 Division Training ASEAN Associated Division Resources Division Assistance Division Division Entities Division

Social Welfare, External Finance Women, Labor Health & Public Information Economic Integration & Migrant Communicable Outreach & Technology Relations Division Workers Diseases Civil Society Systems Division Division Division Division Division

Competition Science & Legal Consumer LAI & NDG Services & Division Technology Protection & Division Agreements IPR Division Division

ASEAN = Association of Southeast Asian Nations. Source: ASEAN Secretariat http://www.asean.org.

operational departments, three of which correspond to labor and migrant workers, disaster management, health and support the work of the three ASEAN community and communicable diseases control, and science and councils and their respective sector ministerial bodies. The technology. Three staff offices are directly under the Office fourth department—Community and Corporate Affairs— of the Secretary-General: Executive Support Division, takes care of administrative matters, including human Internal Audit and Evaluation Division, and Strategic resource development, finance and budget, information Planning and Coordination Division. technology, and legal; intra-ASEAN community affairs, including research, information and statistics; ASEAN- associated entities; and public outreach and civil society. ASEAN Mechanisms Related to GMS, BIMP-EAGA, Each department has two directorates, with the AEC and IMT-GT Department having an additional Macroeconomic and Finance Surveillance Office. The AEC Department covers Initiative for ASEAN Integration and CLMV Economic cooperation in trade, investment, infrastructure, finance, Ministers Meeting. The IAI was launched at the ASEAN agro-industry, and natural resources. It also has a division Leaders Summit in 2000 to help narrow the development concerned with external relations and the Initiative gap and accelerate economic integration in ASEAN. for ASEAN Integration (IAI). The APSC Department In 2001, the ASEAN foreign ministers adopted the Ha deals with political and security cooperation, as well as Noi Declaration on Narrowing the Development Gap external relations. The ASCC Department handles socio- for Closer Economic Integration to follow through on cultural cooperation and cross-cutting issues, such as the leaders’ decision. The IAI mainly addresses the needs culture, education and youth, social welfare, women, of CLMV—Cambodia, the Lao PDR, Myanmar, and

68 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Viet Nam—the newer members of ASEAN. However, ASEAN–Mekong Basin Development Cooperation. the scope of IAI was broadened under the Vientiane The ASEAN–Mekong Basin Development Cooperation Action Program, 2004−2010,69 in 2004 to include (AMBDC) was established in 1996 with the following BIMP-EAGA and IMT-GT, which encompass areas that objectives: “(i) to enhance economically sound and are falling behind in development within their respective sustainable development of the Mekong Basin, (ii) to countries. At the same time, efforts were taken to encourage a process of dialogue and common project strengthen IAI’s coordination with subregional programs, identification which can result in firm economic including the GMS Program. The implementation of IAI partnerships for mutual benefit, and (iii) to strengthen the was driven initially by the IAI Work Plan for 2002–2008, interconnections and economic linkages between ASEAN and subsequently by the IAI Work Plan for 2009–2015. member countries and the Mekong riparian countries.” The The latter tightened the focus of IAI activities in the work AMBDC involves cooperation in infrastructure, trade and plan, and linked them more closely with the program areas investment, agriculture, sustainable development, industry, in the three ASEAN community blueprints (political- human resource development, and science and technology; security, economic, and socio-cultural). it is better known for its flagship project, the Singapore− Kunming Railway Link. Its programs are carried out by The implementation of the IAI Work Plan, including an implementation mechanism involving the Meeting of coordination among the CLMV countries, is managed Ministers jointly with the Secretary-General of ASEAN, and by the IAI Task Force, which comprises the permanent the Steering Committee consisting of officials designated by representatives of the member states to ASEAN. The IAI the ministers and a representative of the ASEAN Secretariat. Task Force is assisted by the IAI & NDG Division of the The IAI & NDG Division of the AEC Department of ASEAN Secretariat. To help mobilize resources for the the ASEAN Secretariat provides the necessary support to implementation of the IAI Work Plan, the IAI Development AMBDC activities. The Ministerial Meeting meets once a Cooperation Forum (IDCF) was established as a platform year, while the Steering Committee convenes in-between for engaging the ASEAN dialogue partners, development the meetings of ministers. Besides the ASEAN Member partners, and international organizations. IDCFs were held States, the AMBDC also includes the PRC. in 2002, 2007, 2010, and 2012. AEM–METI Economic and Industrial Cooperation To further guide ASEAN in narrowing the development Committee. The ASEAN Economic Ministers–Minister divide among its members, the Framework on Equitable of Economy, Trade and Industry (AEM–METI) Economic Economic Development was endorsed at the 19th ASEAN and Industrial Cooperation Committee (AMEICC) is the Summit in November 2011 in Bali, Indonesia. The operational arm of the AEM–METI consultations. The framework outlines the guiding principles for inclusive and AEM–METI has been held annually since 1992 as a forum sustainable growth. for exchanging views on issues ranging from international and regional economies to specific programs of industrial A mechanism closely associated with the IAI is the CLMV cooperation. The objectives of AMEICC are to strengthen Economic Ministers Meeting (EMM), which has met industrial cooperation between Japan and ASEAN, enhance four times, most recently in Siem Reap, Cambodia in the industrial competitiveness of the ASEAN Member States, August 2012. The objectives of the EMM are to further and support the industrial development of new member enhance intra-economic and trade relations within countries. The ASEAN Secretariat and Japan Overseas CLMV, and coordinate activities in subregional, regional, Development Corporation (JODC) serve as co-secretariats of and international fora, fully utilizing their potential to AMEICC. The JODC is a non-profit corporation supported narrow the development gap between the four countries by METI and its mandate is to contribute to the industrial and other countries in the region, as well as accelerating development of developing countries and strengthening the implementation of agreements reached at CLMV of affiliated Japanese companies. As co-secretariat, the summits. The work of EMM has been focused on the JODC is responsible for coordination between the ASEAN implementation of annual action plans consisting of Secretariat and Japanese parties in preparing for ministerial, activities in three areas: economic and trade, human senior economic officials, and working group meetings resource development, and coordination mechanisms.70 under the AEM-METI framework.71 The IAI & NDG Division of the AEC Department of the ASEAN Secretariat is responsible for coordinating AEM–METI matters. 69 The Vientiane Action Program 2004–2010, signed during the 10th ASEAN Summit on 29 November 2004 in Vientiane, Lao PDR, sets out the goals and strategies toward realizing the ASEAN Community. 70 Joint Media Statement of the 4th CLMV Economic Ministers Meeting, Siem Reap, Cambodia on 26 August 2012 (http://www. asean.org/26599). 71 http://www.jodc.or.jp/eng/asean/index

institutional coordination and links 69 AMEICC has eight working groups, four of which ASEAN in terms of the number of its members, partners, are industry-specific, including automotive, chemical, and sectors and areas of cooperation; the ambitious consumer electronics, and textile and garments; and four timeline for building the ASEAN Community; and the are multisector, including human resource development, need to closely monitor the progress toward that vision.72 small and medium-sized enterprises (SMEs), supporting To more effectively and efficiently assist in coordinating and rural industries, statistics, and West–East Corridor and supporting the growing number of activities of Development. The focus of the West–East Corridor ASEAN, monitoring compliance with commitments, and Development Working Group is the Mekong–Japan providing substantive inputs in the deliberations of its key Economic and Industrial Cooperation Initiative (MJ-CI) organs, ASEAN may require a stronger secretariat. In line Action Plan, which was adopted at the second Mekong– with this, the ASEAN Foreign Ministers, during their 44th Japan Summit in Ha Noi, Viet Nam, on 29 October 2010. Meeting in Bali, Indonesia on 19 July 2011, agreed to have The four components comprising the MJ-CI Action Plan the ASEAN Secretary-General conduct a comprehensive are (i) hard infrastructure in the GMS East–West and review of the ASEAN Secretariat’s functions, organization, Southern economic corridors; (ii) trade facilitation and and staff complement jointly with the CPR to ASEAN. The logistics, including Cross-Border Transport Agreement recommendations of the review are in the process of being (CBTA) implementation along these economic corridors; discussed by senior officials of the ASEAN Secretariat. (iii) enhancing SMEs and supporting industries and entrepreneurship, including promotion of special economic Another issue for further discussion relates to funding.73 zones; and (iv) enhancement of the service and new Based on the principle of equality, contributions of the industrial sectors, including food processing and tourism. ASEAN Member States to the budget of the ASEAN Secretariat and other specialized agencies—such as the Issues and Constraints. ASEAN’s approach to regional ASEAN Centre for Energy, ASEAN Development Fund, cooperation has been flexible and pragmatic, with decision- ASEAN Intergovernmental Commission on Human Rights, making based on consensus (the “ASEAN way”) that has and Science Fund—have been made on the basis of a system advantages and disadvantages. It has served ASEAN well of equal contributions. This effectively limits a member’s in many respects, particularly in setting its vision and contribution to the amount that the member with the least goals and in agreeing on frameworks and actions necessary capacity to pay can make. Moving to a system based on to achieve these goals. Its downside is the difficulty of capacity to pay has not been accepted due to the fear that ensuring implementation of and compliance with time- this would unduly increase the influence of members that bound actions and measures under various ASEAN are contributing more, and also potentially lead to a review agreements. The adoption of the ASEAN Charter in 2008 of voting rights. To avoid this potentially contentious issue, is an effort to address this issue, making business processes the ASEAN Member States have been requested to make in ASEAN more rules-based by simplifying its decision- voluntary contributions for specific projects or initiatives. making structure; improving the organization’s compliance Thus, Singapore contributed $500,000 to the ASEAN mechanisms; and providing for dispute settlement principles Development Fund, donated $240,500 for upgrading and mechanisms, including the monitoring of compliance information technology and archival and depository with the decisions resulting from such mechanisms. It systems of the ASEAN Secretariat, and launched an also opens the door for reporting and acting on a “serious e-Government and Telecoms Fellowship Program. breach of the Charter or non-compliance” through the ASEAN Summit. To what extent these provisions will be The Midterm Review of the first Initiative for the IAI Work applied in the future is still unclear, with many rules of Plan concluded that the CLMV countries considered most procedure being discussed and negotiated (e.g., Rules of of the work plan to be useful.74 However, there were some Procedure for the Interpretation of the ASEAN Charter, shortcomings that needed to be addressed: (i) lack of focus, and legal instruments for the Rules for Reference of Non- coherence, and responsiveness to the needs of CLMV Compliance to the ASEAN Summit). With the entry into countries; (ii) inadequate coverage of priority sectors and force of the ASEAN Charter, ASEAN established a number activities required for integration; (iii) weak institutions, of new organs to boost the community-building process of ASEAN. For instance, the CPR’s establishment, which was stipulated in the Charter, was expected to facilitate the 72 The ERIA published in October 2012 the Midterm Review of the Implementation of consensus-building process of ASEAN, being based in the the AEC Blueprint: Executive Summary. ASEAN Secretariat headquarters in Jakarta. 73 R. Severino. 2009. Regional Institutions in Southeast Asia: The First Movers and Their Challenges. Manila. Background Paper 24. ADB Finalization Workshop on Institutions for Regionalism in Asia and the Pacific. Shanghai. The strengthening of the ASEAN Secretariat is also a concern, 74 R. Severino. 2005. Final Report: The Initiative for ASEAN Integration: Midterm considering the increased complexity in the operations of Review of the Work Plan. Jakarta.

70 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt mechanisms, and processes for project formulation, issue of coordination not only between ASEAN and the appraisal, and monitoring; and (iv) weak and uneven subregional programs, but also within ASEAN itself. coordination mechanisms within CLMV countries. A subsequent review conducted in 2007 reiterated the findings and recommended, among other action items, In-Country Institutional to (i) mainstream the IAI framework into the three pillars of ASEAN, (ii) increase the capacity of the IAI & NDG Arrangements Division of the ASEAN Secretariat to monitor developments and establish a feedback mechanism between the IAI Work All ASEAN Member States are members of at least one Plan and the three pillars, and (iii) establish mechanisms other regional or subregional program, besides ASEAN within the ASEAN Secretariat that would result in closer and its sector bodies and programs. Cambodia, the Lao engagement between the IAI & NDG Division and other PDR, Myanmar, and Viet Nam (CLMV) are involved concerned units in the Secretariat.75 in Ayeyawady−Chao Phraya−Mekong Economic Cooperation Strategy (ACMECS), GMS, and Mekong As regards the IDCF, the 2007 review found that the River Commission (MRC), in addition to the ASEAN first IDCF in 2002 received a lukewarm response. In the Economic Ministers−Ministry of Economy, Trade following years, there was an increase in donor interest and Industry (AEM−METI); ASEAN−Mekong Basin resulting in a significant number of projects obtaining Development Cooperation (AMBDC); and Initiative for donor support. The second IDCF had greater participation ASEAN Integration (IAI) and Narrowing the Development and it gave an opportunity for related initiatives—including Gap within ASEAN. Indonesia and Malaysia are members the GMS, BIMP-EAGA, IMT-GT, AMBDC, and of BIMP-EAGA and IMT-GT; while Thailand is a Ayeyawady–Chao Phraya–Mekong Economic Strategy— member of ACMECS, AEM−METI, AMBDC, GMS, to share information on their respective programs and IMT-GT, and MRC.77 Brunei Darussalam is a member of activities. However, the review concluded that “apart from BIMP-EAGA, in addition to ASEAN. These interlocking the wealth of ideas and information shared the outcome of memberships in different but related subregional programs the event was inconclusive and left many donors unclear on require close in-country coordination. While efforts to the next steps and their role in crafting a new IAI strategy. A improve coordination at the regional and subregional levels fundamental issue is how to coordinate the various donor- are important, the first line of defense against a fragmented assisted and subregional initiatives that address the same and uncoordinated approach to regional and subregional fundamental objectives as that of the IAI.” development is at the country level.

Finally, AMBDC and IAI have overlapping objectives, Arrangements within Regional and Subregional programs, and activities.76 When AMBDC was established, Programs: Vertical Coordination. Each member Viet Nam had just become a member, and Cambodia, the country has established in-country arrangements for Lao PDR, and Myanmar were not yet members of ASEAN. coordinating ASEAN, GMS, BIMP-EAGA, IMT-GT, and Thus, the third objective of AMBDC referred to “ASEAN other subregional activities (Table 21). These consist of a member countries” and “the riparian countries” separately. designated minister, senior official, and national secretariat Considering that all CLMV countries are now members of or coordinating office (focal ministry or agency) for each ASEAN, the challenge is how to more closely coordinate the thrusts of the AMBDC and IAI frameworks and activities. of the regional and subregional programs. Table 22 shows Achieving this will simplify and facilitate coordination with the focal ministries or agencies in the member countries other related initiatives. Among the proposed approaches for ASEAN and related subregional groupings outside and is for AMBDC, in particular the AMBDC Steering within ASEAN. For ASEAN as a whole, the focal ministry in Committee, to assume responsibility for coordinating the all countries is the foreign affairs ministry or its equivalent.78 implementation of the economic component of the IAI The focal ministries for the ASEAN Economic Minister, (i.e., those under the AEC pillar). This would avoid the AEM−METI, and AMBDC are the respective ministries of duplication of activities under this component of the IAI trade and industry (commerce) of the member states. The and AMBDC. The AEM−METI mechanism also has many areas of overlap with IAI and AMBDC, accentuating the 77 Myanmar and Thailand are also members of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), with the other 75 C. Guina and D. Hew. 2007. Draft Report: Narrowing the Development Gap in members being Bangladesh, Bhutan, India, Nepal, and Sri Lanka. The Lower ASEAN: Towards a New Strategy for the Initiative for ASEAN Integration. Manila. Mekong Initiative, which covers Cambodia, the Lao PDR, and Viet Nam, was 76 D. Hew. 2009. Draft Report: Study to Realign the AMBDC with the ASEAN launched in 2001 under the sponsorship of the United States Government. Community. Singapore. 78 Foreign affairs and trade are under a single ministry in Brunei Darussalam.

institutional coordination and links 71 Table 21: Country Membership in Selected Regional or Subregional Groupings ASEAN BIMP- Country ASEAN +3 GMS ACMECS BIMSTEC MGC MRC IMT-GT EAGA No. of Membersa 10 13 6 5 7 6 4 3 4 Brunei Darussalam Cambodia PRC Indonesia Lao PDR Malaysia Myanmar Philippines Singapore Thailand Viet Nam ACMECS = Ayeyawady–Chao Phraya–Mekong Economic Cooperation Strategy; ASEAN = Association of Southeast Asian Nations; ASEAN+3 = ASEAN and the PRC, Japan, and the Republic of Korea; BIMP-EAGA = Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area; BIMSTEC = Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation; GMS = Greater Mekong Subregion Program; IMT-GT = Indonesia–Malaysia–Thailand Growth Triangle; Lao PDR = Lao People’s Democratic Republic; MGC = Mekong–Ganga Cooperation; MRC = Mekong River Commission; PRC = People’s Republic of China, REG = regional; TA = technical assistance. a India is the sixth member of MGC. Source: ADB TA 7718-REG Study Team.

Table 22: Focal Ministries or Agencies for ASEAN and Related Subregional Groupings AEM- BIMP- Country ASEAN AEM METI AMBDC IAI CLMV ACMECS GMS EAGA IMT-GT Brunei MOFAT MOFAT MOFAT MOFAT ------MOFAT --- Darussalam Cambodia MFAIC MOC MOC MOC MFAIC MOC MFAIC CDC ------PRC ------MDDA ------MOF ------Indonesia MOFA MOT MOT MOT ------CMEA CMEA Lao PDR MOFA MOIC MOIC MOIC MOFA MOIC MOFA PMO ------Malaysia MOFA MITI MITI MITI ------EPU EPU Myanmar MOFA MNPED MNPED MNPED MOFA MNPED MOFA MNPED ------Philippines DFA DTI DTI DTI ------MINDA --- Singapore MOFA MTI MTI MTI ------Thailand MOFA MOC MOC MOC ------MOFA NESDB --- NESDB Viet Nam MOFA MOIT MOC MPI MOFA MOFA MOFA MPI ------= not applicable. ACMECS = Ayeyawady−Chao Phraya−Mekong Economic Cooperation Strategy; AEM = ASEAN Economic Ministers; AMBDC = ASEAN−Mekong Basin Development Cooperation; ASEAN = Association of Southeast Asian Nations; BIMP-EAGA = Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area; CDC = Council for the Development Cambodia; CLMV = Cambodia, the Lao PDR, Myanmar, and Viet Nam; CMEA = Coordinating Ministry for Economic Affairs; DFA = Department of Foreign Affairs; DTI = Department of Trade and Industry; EPU = Economic Planning Unit; GMS = Greater Mekong Subregion Program; IAI = Initiative for ASEAN Integration; IMT-GT = Indonesia–Malaysia–Thailand Growth Triangle; Lao PDR = Lao People’s Democratic Republic; MDDA = Minister for Development of Disadvantaged Areas; METI = Ministry of Economy, Trade and Industry; MFAIC = Ministry of Foreign Affairs and International Cooperation; MINDA = Mindanao Development Authority; MITI = Ministry of International Trade and Industry; MNPED = Ministry of National Planning and Economic Development; MOC = Ministry of Commerce; MOF = Ministry of Finance; MOFA = Ministry of Foreign Affairs; MOFAT = Ministry of Foreign Affairs and Trade; MOIC = Ministry of Industry and Commerce; MOIT = Ministry of Industry and Trade; MOT = Ministry of Trade; MPI = Ministry of Planning and Investment; MTI = Ministry of Trade and Industry; NESDB = National Economic and Social Development Board; PMO = Prime Minister’s Office; PRC = People’s Republic of China; REG = regional; TA = technical assistance. Source: ADB TA 7718-REG Study Team.

72 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt exceptions are Myanmar, where the focal ministry for these Mindanao, while the senior official is from the Department bodies is the Ministry of National Planning and Economic of Trade and Industry based in the country’s capital. This Development (MNPED), and Viet Nam, where the focal arrangement is unique among the subregional programs ministry is the Ministry of Planning and Investment (MPI) and has both advantages and disadvantages. Although for AMBDC. For IAI, the focal ministries in all CLMV this has facilitated the participation of local authorities in countries are the respective ministries of foreign affairs. subregional cooperation initiatives that directly affect their The focal ministries for the CLMV Economic Ministers areas, there has also been a disconnect between the central Meeting are the respective commerce ministries, again with and local levels in terms of public investment programming the exception of MNPED for Myanmar. and budgeting.

The GMS, BIMP-EAGA, and IMT-GT countries have The national secretariats play a critical role in coordinating adopted different internal institutional arrangements for regional and subregional programs. Their functions range coordinating their activities. In Myanmar, Thailand, and from maintaining liaison with the subregional secretariats Viet Nam, their respective planning agencies serve as the to arranging the participation of national agencies in focal agency for the GMS Program. In Cambodia, this subregional meetings, disseminating information on role is performed by the Council for the Development of various subregional activities, coordinating the position Cambodia (CDC). The Ministry of Finance is the focal of concerned agencies on matters to be taken up in senior ministry in the PRC, while the Prime Minister’s Office officials and ministerial meetings, and interfacing with performs this role in the Lao PDR. The focal agencies local authorities and the private sector. The mechanisms for or ministries for IMT-GT are the planning agencies in coordinating subregional activities among the concerned Malaysia (EPU) and Thailand (NESDB); the coordinating ministries and agencies (e.g., transport, energy, human ministry in Indonesia is the Coordinating Ministry for resource development, and environment) vary by country, Economic Affairs (CMEA). Indonesia and Malaysia have with many convening interagency consultation meetings as the same arrangement for BIMP-EAGA. The focal agency and when necessary. There are more formal arrangements for BIMP-EAGA in Brunei Darussalam is the Ministry in some countries, such as the AEC national coordinating of Foreign Affairs and Trade; in the Philippines, it is the committees in Cambodia and Thailand chaired by their Mindanao Development Authority (MINDA). All of the respective ministers of commerce. Cambodia has also focal agencies are national bodies, except MINDA, which organized a National Committee for ASEAN Affairs chaired is a subnational agency in the Philippines. by the Prime Minister, with the Deputy Prime Minister and minister of foreign affairs serving as vice chair.79 As a general practice, the minister-in-charge, senior official, and national secretariat or coordinator of a particular The interface of the national secretariats with local regional or subregional program in the member countries authorities and the private sector has generally been pursued come from the same ministry. This is true in all ASEAN on an informal basis, which involves the occasional holding and ASEAN-constituted bodies, such as the AEM, of meetings and conferences. However, there are at least AMBDC, and IAI. There are exceptions in the cases of two cases where the participation of local authorities in the GMS, BIMP-EAGA, and IMT-GT. In Thailand, for subregional activities has been institutionalized. The first example, NESDB serves as the national coordinator for is MINDA, which has been referred to earlier. The other is the GMS and IMT-GT, but the minister-in-charge comes the provincial office in Indonesia’s north Sulawesi Province, from the Prime Minister’s Office. In Cambodia, the CDC which is dedicated to BIMP-EAGA concerns and serves as is the national coordinator for the GMS, but the minister the provincial secretariat for BIMP-EAGA with direct links of commerce is the GMS Minister. There does not seem to to the latter’s national secretariat based in Jakarta. be any problem with a national secretariat and minister-in- charge coming from different ministries or agencies, based Although the need to have a strong national secretariat on the experiences of Cambodia and Thailand where the or coordinator is well-recognized, many of these offices agencies concerned are all national bodies. lack the resources and capacity to perform their roles effectively. Moreover, not all sector ministries concerned In the case of Indonesia, the minister-in-charge and senior have designated focal units or officials within their official have been from the CMEA, while the national respective organizations, resulting in a lack of continuity secretariat has been from the Ministry of Trade. This caused and low levels of participation in working group meetings coordination problems until mid-2012 when the incumbent national secretariat moved to CMEA. In the Philippines, the minister-in-charge and national secretariat for BIMP- EAGA are from MINDA based in the southern island of 79 This committee was organized to support Cambodia as chair of ASEAN in 2012.

institutional coordination and links 73 and activities, and inadequate monitoring of convened when an important issue comes up or when subregional initiatives. the need arises. Although many member countries have taken this approach, there are plans to institutionalize Arrangements across Regional and Subregional a mechanism for coordinating regional and subregional Programs: Horizontal Coordination. In-country programs on a government-wide basis. In this regard, more institutional arrangements for coordination within formal mechanisms have been established, such as the regional and subregional programs are generally well- newly constituted Council for Regional Cooperation in defined. However, the situation is not true for in-country the Philippines chaired by the secretary of foreign affairs, coordination among or across regional and subregional and high-level coordinating committees for regional and programs—such as among ASEAN (including its sector subregional cooperation under the chair of the respective bodies and programs), GMS, ACMECS, MRC, and the Prime Minister in Cambodia, Thailand, and Viet Nam. Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). This issue pertains not only to coordination among ministries involved in Comparative Assessment of these programs, but also within those ministries. Some of the factors that constrain in-country coordination efforts Institutional Mechanisms and mentioned during the country consultations included Arrangements a lack of resources, limited technical capacity, historical antecedents and inertia from past practice, and the political Key Features factors and personalities involved at one time or another. Table 23 shows the key features of ASEAN, GMS, Two alternative approaches have been pursued by ministries BIMP-EAGA, and IMT-GT cooperation programs from in member countries to manage their participation in which the following observations can be made: various subregional programs. The first is the organization and/or designation of separate units to deal with different (i) ASEAN is the oldest of the three programs and has subregional programs (e.g., one department and/or unit the most comprehensive and overarching agenda is designated to deal with ASEAN matters and another to involving political, security, socio-economic, and handle GMS matters). This arrangement could work well if cultural cooperation. It has a specific time frame for the departments and/or units concerned closely coordinate achieving its vision of an ASEAN Community. It with each other. However, coordination issues could arise if covers the whole territory of its member countries. there is insufficient communication and flow of information Like ASEAN, GMS covers the whole territory of its between them. The second approach entails the organization member countries, except for the PRC. BIMP-EAGA or designation of a single department and/or unit to be and IMT-GT involve only parts of the territory of their responsible for the work on all subregional programs that member countries, except for Brunei Darussalam. the ministry is involved in. This approach seems to have The GMS, BIMP-EAGA, and IMT-GT programs are worked well where it has been practiced, such as in the case functional and facilitating, and have flexible agendas of the Ministry of Transport of Viet Nam, which has given of cooperation and action. the responsibility of coordinating activities in ASEAN (ii) Summit meetings in all programs of cooperation were and all other subregional programs to its International held several years after their establishment, with the Cooperation Department.80 The same approach has been first GMS Summit held after 8 years; ASEAN, 9 years; taken by most sector ministries in other GMS countries. BIMP-EAGA, 11 years; and IMT-GT, 13 years. The ASEAN Summit is now held twice a year, the GMS In-country coordination across ministries and subregional Summit meets every 3 years, and BIMP-EAGA and programs has not yet been well established in most member IMT-GT meet once a year on the sidelines of the countries compared to in-country coordination within ASEAN Summit. ministries and subregional programs. This was identified (iii) All cooperation programs started initially without a during the country consultations conducted for this study central secretariat, except for the GMS. The secretariat as a major gap in coordination within member countries. of ASEAN was established 9 years after its launching, This issue has been addressed by member countries in BIMP-EAGA after 10 years, and IMT-GT after various ways. At one end of the spectrum is the informal, 13 years. In contrast, ADB has performed the role ad hoc approach whereby interagency meetings are of secretariat for the GMS Program almost from the beginning. This is an advantage that the GMS 80 There was a separate ASEAN Department in the Ministry of Transport in Viet Nam, Program enjoyed over the other three programs. but this was merged with the International Cooperation Department in 2000. Moreover, while the core staff of the GMS Secretariat

74 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Table 23: Key Institutional Features of ASEAN, GMS, BIMP-EAGA, and IMT-GT Programs Key Features ASEAN GMS BIMP-EAGA IMT-GT Year established 1967 1992 1994 1993 Membership or Coverage Originally 5, currently 10 6 member countries Subnational areas of Subnational areas of member states (1 province [Yunnan] and 4 member countries, 3 member countries 1 autonomous region except for Brunei [Guangxi Zhuang] in the Darussalam People’s Republic of China) Geographical Widely dispersed with part Contiguous Dispersed Contiguous, except for the Characteristics in mainland Southeast Indonesian component Asia and others in archipelagic Southeast Asia Sectors and Areas of Political, security, Socioeconomic Socioeconomic Socioeconomic Cooperation socioeconomic, and cultural Summit Meeting • Year started • 1976 • 2000 • 2005 • 2006 • Frequency • Annually since 1995; • Once every 3 years • Annually (on the • Annually (on the twice a year since 2008 sidelines of the ASEAN sidelines of the ASEAN Summit) Summit) Secretariat • Year established • 1976 • 1992 • 2004 • 2007 • Location • Jakarta, Indonesia • ADB headquarters, • Kota Kinabalu, Sabah, • Putrajaya, Malaysia Manila Malaysia • Core staff complement • 99 • 6 • 4 • 4 • Funding • Contribution from • ADB technical • Malaysian and Sabah • Malaysian Government member states assistance (TA) governments (through (through TA project: TA projects: ADB ADB as requested) as requested; GTZ completed) Decision-Making Rules By consensus; moving By consensus By consensus By consensus and Processes to rules-based under the ASEAN Charter National Secretariat Ministries of foreign affairs Economic ministries or Economic or planning Economic or planning agencies, except in the ministries or agencies ministries or agencies Lao People’s Democratic Republic Projects • Coverage • Flexible (10-x) • Flexible (6-x) • Flexible (4-x) • Flexible (3-x)

• Identification • As proposed in ASEAN • Based on sector or • As proposed in clusters • As proposed in working sector bodies subsector studies and working groups groups • Development and • Implementing agencies • Implementing agencies • Implementing agencies • Implementing agencies implementation with ADB assistance • Monitoring • Sector bodies and the • Working Groups and • Working groups and • Working groups and ASEAN Secretariat GMS Secretariat BIMP-EAGA Secretariat IMT-GT Secretariat Private Sector Counterpart Various business GMS Business Forum BIMP-EAGA Business Joint Business Council associations Council Local Government No specific body Economic Corridors Forum Local Government Forum Governors Forum Participation Donor Coordination Various; Initiative for Development Partners’ Ad hoc meetings Ad hoc meetings ASEAN Integration Meeting Development Cooperation Forum ADB = Asian Development Bank, ASEAN = Association of Southeast Asian Nations, BIMP-EAGA = Brunei Darussalam−Indonesia−Malaysia−Philippines East ASEAN Growth Area, GMS = Greater Mekong Subregion, IMT-GT = Indonesia−Malaysia−Thailand Growth Triangle, REG = regional, TA = technical assistance. Source: ADB TA 7718-REG Study Team.

institutional coordination and links 75 is made up of only a few members, they are assisted by Mapping the Principal Bodies of ASEAN, ADB sector staff in such areas as agriculture, energy, GMS, BIMP-EAGA, and IMT-GT environment, human resource development, tourism, and transport. Table 24 maps the principal bodies of ASEAN, GMS, (iv) Decision-making in all programs is by consensus, BIMP-EAGA, and IMT-GT at the overall and sectoral although flexibility is provided through the levels. It provides a general picture of counterpart “ASEAN-x” (or “6-x”) principle. The ASEAN Charter institutions among the four initiatives, and their respective leaves the door open for the possibility of a consensus work programs that require some form of coordination. not being reached, stating that “[w]here consensus The following observations can be made from the tables: cannot be achieved, [the] ASEAN Summit may decide on how a specific decision can be made.”81 (i) ASEAN has the most complex institutional (v) The national secretariats of ASEAN are based in the arrangements and mechanisms, involving several Ministry of Foreign Affairs of the Member States, bodies and layers of institutions; its counterparts in while those in the GMS, BIMP-EAGA, and the GMS, BIMP-EAGA, and IMT-GT programs are IMT-GT are from the economic ministries of the few and clear-cut. member countries (planning, trade, commerce or (ii) Coordination with the ASEAN Secretariat requires industry, and environment). interfacing with several of its divisions (e.g., not just (vi) The GMS Program (GMS Business Forum), BIMP- with the External Relations Division or the IAI & EAGA (Business Council), and IMT-GT (Joint NDG Division, but also with the other relevant sector Business Council) subregional programs have their divisions). dedicated private sector counterparts, while ASEAN (iii) Ideally, there should be a coordinating mechanism— has many affiliated business associations involving formal or informal—for counterpart institutions at several sectors and subsectors. These business the overall and sectoral levels, but the amount of time associations consist of private sector organizations and resources required would have to be carefully in ASEAN member countries that have constituted considered. themselves into a regional federation or association. (iv) The complexity of institutional arrangements across (vii) The GMS (Economic Corridors Forum), programs suggests that improving coordination BIMP-EAGA (Local Government Forum), and within member countries and among the secretariats IMT-GT (Chief Ministers and Governors Forum) of ASEAN, GMS, BIMP-EAGA, and IMT-GT subregional programs have established their would constitute the first steps toward strengthening mechanisms for engaging local governments and coordination among the four initiatives. administrations in the development of their respective areas. ASEAN does not have any similar mechanism, as its main focus has been at the national level. Strengths (viii) All of the regional and subregional programs have mechanisms for mobilizing and coordinating donor After 44 years, ASEAN has accumulated a wealth of support, ranging from regular and formal to ad hoc experience and expertise in regional cooperation, and arrangements. developed closer relations among its Member States. It (ix) ASEAN holds regular dialogues with development now has a legal personality, with rules and norms governing partners, including through the Initiative for ASEAN accountability and compliance, and a streamlined Integration Development Cooperation Forum. The organization. It has well-established practices and processes, GMS Program organizes the Development Partners’ as well as lines of communications among Member States Meeting back-to-back with its ministerial meetings. and concerned government instrumentalities. There is a The BIMP-EAGA and IMT-GT appear to have taken strong sense of belonging and ownership among members. a more ad hoc approach, with no specific body or Furthermore, ASEAN has built up a network of supporting regular mechanism for donor coordination. institutions in the public and private sectors.

The GMS Program turned 20 in 2012, less than half the lifespan of ASEAN, but it too has made substantial progress, especially in promoting physical connectivity among its members. Its informal, flexible, and results-oriented approach has helped considerably in building trust and confidence in a subregion with a long history of conflict. It 81 ASEAN Charter. Chapter VII, Article 20, para. 2. has a relatively simple organizational structure that is well-

76 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt Table 24: Mapping of Principal Bodies of ASEAN, GMS, BIMP-EAGA, and IMT-GT Item ASEAN GMS BIMP-EAGA IMT-GT Overall Direction and ASEAN Summit Leaders Summit Leaders Summit Leaders Summit Coordination AEC Council Ministerial Meeting (MM)/ MM/SOM MM/SOM ASCC Council Senior Officials Meeting BIMP-Facilitation Centre Centre for IMT-GT CPR (SOM) (BIMP-FC) Subregional Cooperation AEM/SEOM GMS Secretariat (CIMT) AMBDC-SC/AEM-METI IAI Task Force ASEAN Secretariat (ASEC) ACC Agriculture AMAF and SOM-AMAF/ Working Group on Working Groups on Agro- Working Group on Halal ASOF Agriculture industry and Fishery Products and Services Agriculture, Industry and under the Natural Natural Resources Resources Development Division, ASEC (NRD) Cluster Energy AMEM and SOME Subregional Energy Forum Working Group on Energy Transport and ASEAN Centre for Energy under the NRD Cluster Infrastructure Working ASEAN Council on Group Petroleum Infrastructure Division, ASEC Environment AMME and ASOEN Working Group on Working Group on No specific body ASEAN Centre for Diversity Environment Environment and Environment Division, Environment Operations Forestry under the NRD ASEC Center Cluster Human Resource ASED and SOM-ED Working Group on Human No specific body Working Group on Human Development AHMM and SOMHD Resource Development Resource Development ALMM and SLOM ASCC Department, ASEC Information and TELMIN and TELSOM Subregional Working Group on ICT Transport and Communication Infrastructure Division, Telecommunications under the Transport, Infrastructure Working Technology (ICT) ASEC Forum Infrastructure, and ICT Group Development (TIICTD) Cluster Tourism M-ATM Tourism Working Group Working Group on Tourism Tourism Working Group ASEAN NTOs Meeting Mekong Tourism Cluster Services and Investment Coordination Office Division, ASEC Trade, Transport AFTA Council Subregional Transport CIQS Task Force Trade and Investment Facilitation, and ASEAN Directors-General Forum (STF) Working Group Logistics of Customs Meeting STF Working Group ASEAN-TM and STOM NTFC Trade and Facilitation Division, ASEC Transport ASEAN-TM and STOM STF Working Groups on Air, Transport and Infrastructure Division, Land, and Sea Transport Infrastructure Working ASEC under the TIICTD Cluster Group ACC = ASEAN Connectivity Coordinating Committee; AEC = ASEAN Economic Community; AEM = ASEAN Economic Ministers Meeting; AFTA = ASEAN Free Trade Area; AHMM = ASEAN Health Ministers Meeting; ALMM = ASEAN Labor Ministers Meeting; AMAF = ASEAN Ministers Meeting on Agriculture and Forestry; AMBDC-SC = ASEAN−Mekong Basin Development Cooperation Steering Committee; AMEM = ASEAN Ministers on Energy Meeting; AMME = ASEAN Ministerial Meeting on the Environment; ASCC = ASEAN Socio-Cultural Council; ASEAN = Association of Southeast Asian Nations; ASED = ASEAN Education Ministers Meeting; ASOEN = ASEAN Senior Officials on the Environment; ASEAN-TM = ASEAN Transport Ministers Meeting; ASOF = ASEAN Senior Officials on Forestry; BIMP-EAGA = Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area; CPR = Committee of Permanent Representatives; CIQS = customs, immigration, quarantine, and security; GMS = Greater Mekong Subregion; IAI = Initiative for ASEAN Integration; IMT-GT = Indonesia–Malaysia–Thailand Growth Triangle; M-ATM = Meeting of the ASEAN Tourism Ministers; METI = Ministry of Economy, Trade and Industry; NTFC = National Transport Facilitation Committee; NTOs = national tourism organizations; REG = regional; SEOM = Senior Economic Officials Meeting; SLOM = Senior Labor Officials Meeting; SOM-ED = Senior Officials Meeting on Education; SOME = Senior Officials Meeting on Energy; SOMHD = Senior Officials Meeting on Health Development; STOM = Senior Transport Officials Meeting; TELMIN = ASEAN Telecommunications and Information Technology Ministers Meeting; TELSOM = Telecommunications and Information Technology Senior Officials Meeting; TA = technical asistance. Source: ADB TA 7718-REG Study Team.

institutional coordination and links 77 suited to the functional nature of GMS cooperation. Its seen.82 The GMS Program is launching a monitoring association with ADB has provided it with the financial system for transport and trade facilitation along and technical resources to pursue subregional cooperation the GMS economic corridors. BIMP-EAGA and on a cumulative basis, identify and develop projects based IMT-GT are seeking to put a suitable monitoring on sector strategies and frameworks, and implement system in place as part of their implementation infrastructure and non-infrastructure projects. Achieving blueprints to track the activities of their respective concrete and visible results has been a particular strength of working groups. the GMS Program. Both the GMS Program and ASEAN (v) Public–private relations in ASEAN and the three manifest fairly strong political commitment and support. subregional programs are still evolving, with those in ASEAN being more mature and advanced compared The strength of both BIMP-EAGA and IMT-GT is with those in the GMS, BIMP-EAGA, and IMT-GT. that they are focused on a specific and relatively limited Having been in existence for a longer period of time geographic space, allowing them to identify and implement and being composed of large enterprises, ASEAN discrete and concrete projects at the local level. However, business associations are relatively better funded than this potential strength has not been fully realized in either the GMS Business Forum, BIMP-EAGA Business of these two subregional programs as they appear to be Council (BEBC), and IMT-GT Joint Business lacking the same level of political commitment and support Council. These subregional business organizations, enjoyed by the GMS Program and ASEAN. especially BEBC, need more substantial support to sustain and expand their promotional activities.83 A corollary issue concerning private sector participation Cross-Cutting Issues and Constraints in regional and subregional initiatives is how to increase the participation of SMEs. Based on the discussion in the previous sections, the following cross-cutting issues are relevant for each of the four programs under review: Enhancing Institutional (i) In-country coordination (among central agencies Coordination and between central and local bodies) improves the likelihood of success of various initiatives. This Coordination Initiatives includes strengthening the capacity of national secretariats in the GMS, BIMP-EAGA, and IMT-GT. Some efforts have been taken to coordinate activities among (ii) Further assessments of the capacities of the central ASEAN, GMS, BIMP-EAGA, and IMT-GT: secretariats would be useful. For instance, the ASEAN Secretariat is coping with increased demands as its (i) Many member countries have established mechanisms mandate expands ahead of the establishment of the for in-country coordination, such as the organization ASEC in 2015. Meanwhile, the BIMP-EAGA and of interministerial coordinating committees, to enable IMT-GT secretariats face questions on their legal them to take a unified approach to their participation status as well as on funding, sustainability, and level of in ASEAN, GMS, BIMP-EAGA, and IMT-GT. operations. Finally, a longer-term concern facing the (ii) Cross attendance in meetings has been encouraged. GMS Secretariat is the role of ADB in financing and For instance, the ASEAN Secretariat is invited managing. to relevant GMS meetings as a standard practice, (iii) BIMP-EAGA and IMT-GT, and to a lesser extent including the Development Partners’ Meeting, which ASEAN, face significant challenges in project is held back-to-back with its ministerial meetings. The development and implementation, and resource ADB President and other senior ADB staff are invited mobilization. (iv) The ability to adequately monitor and evaluate projects is a common concern among the four cooperation 82 The scorecard mechanism was initiated by ASEAN in 2007, with the first AEC programs. ASEAN has developed a scorecard system Scorecard, covering January 2008 to December 2009, released in 2010. This report was highly aggregated and did not show the extent to which the member of tracking compliance with commitments under countries have complied with their respective commitments. ASEAN Secretariat. the AEC, although its effectiveness in improving 2010. Charting Progress Towards Regional Economic Integration: ASEAN Economic compliance through peer pressure still remains to be Community Scorecard. Jakarta. 83 The matter is not just a funding issue as many private companies would like to see more substantial progress in the implementation of subregional programs before committing time and resources to the activities of the subregional business organizations.

78 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt to ASEAN, BIMP-EAGA, and IMT-GT summit to strengthen the links between their activities. The same meetings. observation can be made about IMT-GT’s interface with (iii) ADB staff involved in the GMS, BIMP-EAGA, the ASEAN Secretariat.85 and IMT-GT programs provided inputs during the preparation of the Master Plan on ASEAN On the GMS Program, the MPAC states that while the Connectivity (MPAC), and are occasionally invited to GMS initiative is generally consistent with ASEAN the ASEAN Connectivity Coordinating Committee Connectivity and AEC Blueprint, it is necessary to ensure meetings as resource persons. “that the GMS and ASEAN programmes and projects mesh (iv) BIMP-EAGA and IMT-GT are mentioned in together very well. This is not likely to be smooth sailing, ASEAN documents as being part of the Initiative for especially since the two programmes have been pursuing ASEAN Integration and Narrowing the Development parallel efforts and have sunk substantial investments in Gap (IAI & NDG), with the need for coordinating certain areas of cooperation, which although should ideally IAI & NDG activities with the GMS Program being be consolidated may involve nuances and detailed issues similarly highlighted. that may be difficult to iron out. Wholesale subsuming of (v) A memorandum of understanding (MOU) between one programme to another is clearly not a feasible option.” ADB and the ASEAN Secretariat governing working relations and arrangements was entered into in 2006; a new MOU providing for cooperation in several areas, Guiding Principles including connectivity, financial market integration, environmental sustainability, and trade and In examining approaches and modalities for enhancing investment was signed on 4 April 2012 (Appendix C). institutional coordination among ASEAN, GMS, BIMP- EAGA, and IMT-GT, it will be useful to keep in mind the These efforts show that the need for closer coordination following guiding principles: among ASEAN and the three subregional programs has been recognized by the concerned parties. However, such (i) The centrality of ASEAN in the overall regional efforts have not been sufficient to ensure consistency and and subregional cooperation framework should be realize synergies between these programs and ASEAN. In underscored. its discussion of the role of GMS, BIMP-EAGA, and (ii) “If it’s not broken, don’t fix it.” This dictum has served IMT-GT in the AEC, the MPAC states that “... there is many organizations well, and will help avoid “change a need to promote links and interface among the various for the sake of change.” sub-regions … given the larger geographical coverage (iii) To the extent possible, build on existing institutions and synergy that can be generated... The sub-regions can rather than establish new ones; what is required in be used as test beds for accelerating implementation of many cases is the strengthening of existing, rather relevant ASEAN agreements... Conversely, the sub-regions than the creation of new, bodies. can capitalise on the existing AEC initiatives in order to (iv) Regularize ad hoc mechanisms and arrangements that further strengthen their development agendas.” On BIMP- are deemed useful and necessary before introducing EAGA, it observes: “Despite being a test bed, institutional new ones. relations and linkages between BIMP-EAGA and ASEAN (v) Give adequate attention to improving in-country is limited to the holding of the EAGA Leaders Summit coordination, as this is one of, if not the most, important back to back with the ASEAN Leaders Summit. Relations link in regional and subregional cooperation. between the secretariats have been ad hoc at best. If EAGA (vi) In addressing in-country coordination issues, bear in is to be truly a test bed for ASEAN agreements, institutional mind that “one size does not fit all.” arrangements will have to be strengthened.”84 (vii) Consider the different levels of institutional development and capacities of member countries in To improve coordination, BIMP-EAGA has invited the approaches and measures pursued. the ASEAN Secretariat to its ministerial and senior (viii) Take into account the cost implications of proposed officials’ meetings. However, the ASEAN Secretariat’s measures, in terms of both financial and human participation in these meetings has not been at a sufficiently resources, to ensure that they are reasonable and realistic. commensurate level, and has been limited to the exchange (ix) Provide mechanisms for review and feedback to of general information. The BIMP-Facilitation Centre and determine the efficacy of the steps taken to enhance ASEAN Secretariat do not examine each other’s programs institutional coordination.

85 The current Initiative for ASEAN Integration Work Plan does not include 84 Footnote 16, pp. 26–28. BIMP-EAGA and IMT-GT.

institutional coordination and links 79 (x) Build on best practices in ASEAN, GMS, BIMP- Gap, and the Cambodia−Lao PDR−Myanmar−Viet Nam EAGA, and IM-GT, as well as relevant best practices Economic Ministers Meeting.86 in other regional and subregional programs. (xi) Consider selective and/or targeted and time-bound, To strengthen inter-program coordination, one of the key project-driven coordinating mechanisms (e.g., specific actions required in the MPAC is to “[s]et up a coordinating sector or theme). mechanism and structure between the ASEAN Secretariat... and the respective secretariats of the subregional initiatives and the ADB... to ensure the consistency and Possible Approaches and Modalities complementarities of the policies, programmes and projects of the subregional initiatives with the policies, programmes Approaches and modalities for enhancing coordination and projects of ASEAN…”87 The following options could among ASEAN and the three subregional programs be considered to implement this directive: (i) establish a can be pursued along three major areas of focus: committee composed of the secretariats of ASEAN, GMS, (i) strengthening institutional or organizational structures BIMP-EAGA, and IMT-GT; (ii) establish two committees, and links, (ii) improving coordination mechanisms, and one for ASEAN−GMS and one for ASEAN−BIMP-EAGA (iii) strengthening institutional capacity for performing and IMT-GT, to take account of the differences between secretariat and coordination functions. the two sets of groupings; or (iii) organize a periodic consultation meeting among the secretariats of ASEAN, Strengthening Organizational Structures and Links. GMS, BIMP-EAGA, and IMT-GT. This study did not seek to conduct a comprehensive review of the organizational structures of ASEAN, GMS, BIMP- One of the proposals put forth by representatives of the EAGA, and IMT-GT individually, as extensive institutional subregional and regional programs in the course of the reviews have been conducted on them separately. It only country consultations for this study was the establishment identifies areas where fine-tuning of such structures of “formal links” between ASEAN and BIMP-EAGA and could facilitate and improve coordination among them, IMT-GT. They are of the view that links are considered with emphasis on streamlining of existing organizational necessary for the following reasons: structures rather than creating new ones. It was also not aimed at recommending any specific organizational (i) The BIMP-EAGA and IMT-GT subregions are structure for in-country coordination because that is the integral parts of ASEAN, and fast-tracking the prerogative of each member country, and a structure that implementation of ASEAN agreements and programs works in one setting may not do so in another. It only cites in these subregions can demonstrate more concretely the approaches used by member countries to coordinate the progress of ASEAN cooperation. regional and subregional programs, and highlights certain (ii) BIMP-EAGA and IMT-GT could pilot test the practices that have helped in improving in-country implementation of various ASEAN schemes (e.g., coordination of regional and subregional initiatives. single window; customs, immigration, quarantine, and security; and electronic processing of documents) Issues and constraints affecting ASEAN, GMS, BIMP- in specific border crossings, which could then be EAGA, and IMT-GT, including those involving their replicated in other border areas based on the lessons organizational frameworks, have been highlighted in this learned from the pilot tests. section of the report. Organizational reviews that have (iii) BIMP-EAGA and IMT-GT could benefit from previously been conducted for BIMP-EAGA and IMT- technical expertise in the ASEAN Secretariat, as well GT underlined certain weaknesses in their organizational as improve their access to technical and other resources structures. The recommendations of these reviews were from the ASEAN external partners. intended to help resolve internal, as well as external (with other regional cooperation programs), coordination (iv) The development of BIMP-EAGA and IMT-GT issues. As regards ASEAN, a study is being conducted supports the third pillar of the ASEAN Community, on strengthening the ASEAN Secretariat. It notes several which is aimed at “raising the standard of living of bodies and programs within ASEAN that are related to disadvantaged groups and the rural population” and GMS, BIMP-EAGA, and IMT-GT that have overlapping the “active involvement of local communities.” concerns in terms of geographical coverage and programs of cooperation. These include ASEAN−Mekong Basin

Development Cooperation, ASEAN Economic Ministers− 86 This exercise is not part of the terms of reference of this study and is better Ministry of Economy, Trade and Industry Initiative for undertaken by the ASEAN Secretariat. ASEAN Integration and Narrowing down the Development 87 Footnote 16, p. 22.

80 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt (v) Connectivity is critical to the development of BIMP- the sector working groups, which, under formal structures, EAGA and IMT-GT, as most of the areas they cover would have the responsibility for formulating action plans are not contiguous and less connected physically. and overseeing their implementation. There are still many missing links involving sea and air linkages among the BIMP-EAGA and IMT-GT areas, Strengthening Capacity. The lack of capacity of regional, as well as between these areas and the main markets subregional, and national secretariats is a common issue in their respective countries. Enhancing connectivity affecting the coordination of regional and subregional among these areas and with the rest of ASEAN would economic cooperation initiatives within member countries help realize their economic potential and benefit and across regional and subregional programs. In many ASEAN as a whole. cases, inadequate financial, human, and technical resources have constrained these bodies from performing their “Formal links,” if pursued by the programs concerned, coordination functions effectively. Thus, strengthening might need to be defined more specifically, which can organizational structures and coordination mechanisms take many forms. The term “regular links” might offer may not lead to substantial improvements in institutional more flexibility instead of “formal links.” The proposed coordination and links among the regional and subregional links might require the institutionalization of certain programs if the capacity constraints faced by many national coordination mechanisms and arrangements between and subregional secretariats are not simultaneously ASEAN and the two subregional programs. addressed. An important consideration in delivering capacity building interventions for secretariats is the need Improving Coordination Mechanisms. Coordination to promote a basic understanding of what a secretariat is, mechanisms are methods and processes used within set the norms for its effective operations, and determine the existing organizational structures, as shown earlier with required competencies of its staff. some examples. It is important not only to continue implementing these mechanisms, but also to carry A review of ADB-funded and administered technical out current coordination efforts more regularly and assistance (TA) projects for capacity building and secretariat systematically. Significant improvements in coordination support in ASEAN, GMS, BIMP-EAGA, and IMT-GT can be achieved by seemingly simple steps if there is a was conducted. The review aimed to provide an indicator common understanding and commitment among all of how and to what extent ADB and its co-financiers have parties concerned. Table 25 provides an illustrative list of helped in strengthening the capacity of the national and regional and subregional coordination mechanisms and central secretariats of the four initiatives (Appendix E). An how they might be strengthened. examination of the TA projects for capacity building and secretariat support shows the following: It is also important to identify the stage in the project cycle where coordination mechanisms should be strengthened. (i) For ASEAN, a great majority of the capacity building Based on the strategy and programs review, it is observed TA projects were for the strengthening of financial that the most important point of coordination would surveillance and related issues, which accounted for be at the planning stage where complementarities and around two-thirds of the total cost of all such TA convergence points could be identified. This implies that projects. relevant officials of ASEAN and the three subregional (ii) For the GMS, the largest allocation was for the Phnom programs should have a mechanism (not necessarily a Penh Plan for Development Management, which formal structure) to discuss the scope, conduct, and results accounted for nearly two-thirds of the total cost of TA of master plans and similar studies in key sectors from a projects for capacity building and secretariat support. region-wide perspective. This mechanism is also important The total cost of the projects earmarked for secretariat for policy-related initiatives that could have area-specific support accounted for about one-quarter. There was implications, especially for BIMP-EAGA and IMT-GT one TA project ($500,000) for capacity building (e.g., the importance of addressing the cabotage policy). for national institutions under the GMS Program This region-wide planning mechanism will enhance in 2001. awareness of the “big picture” on the part of the subregional (iii) In BIMP-EAGA and IMT-GT, the TA projects for programs; on the part of ASEAN, it will raise awareness secretariat support accounted for nearly two-thirds of of the specific priorities and concerns of the subregional the total amount for capacity building and secretariat programs. For this mechanism to function effectively, it is support. There were two TA projects for strengthening important that participants are from the relevant agencies the national secretariats in the Philippines (1996) and responsible for planning, policy, and regulation in a given Indonesia (2004). sector. This mechanism should have an effective link with

institutional coordination and links 81 Table 25: Enhancing Coordination Methods and Processes Mechanisms Current Practice Areas for Improvement Region-wide coordination for planning at the Master plans, roadmaps, and sector Provide platform or mechanism where overall and sector levels analytical work not vetted across programs these master plans, roadmaps, and sector analytical work can be discussed across programs Designation of focal points (units and Some designations made, but gaps at the Designate focal points in each organization persons) at the overall and sector levels sector level exist; designations not formally at different levels; when designated, review communicated to external partners; the appropriateness of the designated focal designated focal points not the appropriate points and communicate the designated focal ones in certain cases points to external partners Designation of counterparts at different levels Counterparts usually well-identified at the Clarify and establish the main counterparts and key sectors of cooperation overall level, but not at the sector level at various levels and sectors, with the designation of focal points helpful in this process Communication among staff of the Limited, sporadic, irregular Increase and regularize communication secretariats of ASEAN, GMS, among counterparts in the secretariats, and BIMP-EAGA, and IMT-GT establish communication links where there are none at present Exchange of information among the Exchange of information taking place mainly Regularize the flow of information among secretariats of ASEAN, GMS, BIMP-EAGA, during meetings; referring to each other’s the secretariats, and specify the type of and IMT-GT websites not sufficient, containing only basic information required by the respective information and not regularly updated counterparts ASEAN, BIMP-EAGA,IMT-GT, GMS. Source: ADB TA 7718-REG Study Team.

Only a few TA projects have been extended for capacity building of the national secretariats of the four groupings.88 Moreover, although some TA projects were designed to support the operations of the regional and subregional secretariats, the projects did not explicitly include inputs to improve coordination among the regional and subregional programs. Thus, ADB could consider a TA project to (i) strengthen capacity and improve mechanisms for coordination among the secretariats of ASEAN, GMS, BIMP-EAGA, and IMT- GT; 89 (ii) strengthen the capacity of national secretariats and improve institutional mechanisms for in-country coordination of regional and subregional initiatives;90 and (iii) establish mechanisms for coordinating region-wide planning activities (e.g., formulate master plans, sector plans, and roadmaps; and conduct sector strategy studies); and (iv) enhance the interface between sector bodies and agencies in the three subregional programs and ASEAN.

88 Based on a review of the IAI Work Plan projects as of September 2005, it appears that no capacity building project specifically designed for strengthening Cambodia− Lao PDR−Myanmar−Viet Nam (CLMV) secretariats had been approved and/ or implemented as of that date. Information on the IAI Work Plan for the more recent period is not yet available, but it is quite probable that the situation has not changed. R. Severino. 2005. Final Report: The Initiative for ASEAN Integration: Midterm Review of the Work Plan. Jakarta. 89 If this proposal were approved, it would help implement the MPAC directive to establish (i) a coordinating mechanism and structure among the ASEAN Secretariat and those of the GMS, BIMP-EAGA, and IMT-GT; and (ii) “formal links” between ASEAN and BIMP-EAGA or IMT-GT. The term “regular links” is used in this study instead of “formal links” to ensure that BIMP-EAGA and IMT-GT retain their flexibility in being focused on a smaller geographical area compared to ASEAN as a whole. 90 This activity will have to be conducted on a selective basis, with priority to CLMV and other countries where assistance is clearly needed.

82 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt V. summary of major findings

he mapping of strategies and programs, as well The study charted existing and potential points of as institutional links, between the Association of convergence and complementarities across the regional Southeast Asian Nations (ASEAN) and the Greater and subregional programs at the strategy and operational TMekong Subregion (GMS), Brunei Darussalam− levels, drawing from the AEC Blueprint and the Master Indonesia−Malaysia−Philippines East ASEAN Growth Plan on ASEAN Connectivity (MPAC), and focusing on Area (BIMP-EAGA), and Indonesia−Malaysia−Thailand initiatives to promote connectivity in transport and energy, Growth Triangle (IMT-GT) subregional programs is part and transport and trade facilitation. It also examined of efforts to enhance the process of economic integration the state of institutional coordination and links between in the region. Supporting this process has been made more ASEAN and the subregional programs to identify areas compelling by the proximity of the ASEAN Economic that need strengthening, so that existing and prospective Community (AEC) target date of 2015. The practical links between them can be pursued in a more purposive reality is that while ASEAN and the three subregional and integrated manner toward greater convergence with programs are different from each other in many respects, AEC goals. The major findings of the study covering the they are not independent from each other given their shared strategy and institutional links between ASEAN and the aspirations. The AEC has important ramifications for the three subregional programs are presented below. medium- and long-term goals of the three subregional programs whose memberships overlap with that of ASEAN (except for the People’s Republic of China [PRC] in the Major Findings GMS). At the same time, the three subregional programs can play an important role in supporting ASEAN on its path to the AEC. This study has been pursued in the Strategy and Program Links context of such interdependence, which opens up many opportunities for developing a mutually supportive and The review of the program-wide strategies of the GMS, beneficial relationship between ASEAN and the three BIMP-EAGA, and IMT-GT showed that there is a strong subregional programs. recognition of the importance of ASEAN. The program- wide strategies of these three subregional programs view This study was designed to serve as a resource for ASEAN, ASEAN integration as providing the opportunity for GMS, BIMP-EAGA, and IMT-GT in discussions on spurring economic growth and honing the competitive how to better improve linkages among themselves. The advantage of production units for the wider regional and national and regional secretariats should take the lead global markets. At the same time, the subregional programs in initiating relevant actions, while other development recognized the need to overcome development constraints partners, including the Asian Development Bank (ADB) to realize these opportunities. Regional cooperation is a and the Australian Agency for International Development potent means for subsets of the ASEAN Member States to (AusAID), could use the results of this study to identify work collectively in overcoming constraints that are unique follow-on studies and other possible interventions in to their particular settings. support of ongoing efforts at accelerating economic integration in ASEAN.

summary of major findings 83 The launch of the AEC in 2007, reinforced by the entry development strategies. Equally important, these corridors into force of the ASEAN Charter in 2008, has served as a have provided a “land bridge” to connect ASEAN more galvanizing force in linking the strategies of the subregional intensively with markets in the PRC, and farther to the programs more closely with the ASEAN agenda. The AEC west, to India and the rest of South Asia. The subregional provided greater clarity to the pillars of integration, as programs have also served as a platform where subsets of well as a blueprint of action that gave a more definitive ASEAN countries can find common ground in addressing anchor for the strategies of the subregional programs. development constraints through strategies and actions Thus, a stronger link with the AEC agenda became more that are more adaptable to their particular circumstances, perceptible in the “second generation” strategic frameworks while remaining consistent with ASEAN objectives. These of the subregional programs. Moreover, across all the programs have further allowed them to “test the waters,” second generation frameworks, the proximity of the AEC participate gradually and incrementally in activities where in 2015 seems to have spurred a greater sense of urgency to capacities are still lacking, and allocate resources where accelerate the economic integration process, as evidenced national and regional priorities are aligned with each other. by the increasing use of specific ASEAN frameworks to guide subregional initiatives. ASEAN, on the other hand, has played a more effective role in institutional connectivity involving region-wide Among the subregional programs, BIMP-EAGA has liberalization measures, standards and rules harmonization, manifested the strongest link with ASEAN. In fact, BIMP- and policy coordination, among other areas. It would EAGA has always considered itself to be a subset of ASEAN, be difficult for subregional programs to take the lead in and has brought this relationship to bear in the formulation these areas. A good case in point is the Customs Transit of its various initiatives. TheBIMP-EAGA Roadmap to System (CTS) in the GMS Cross-Border Transport Development, 2006–2010 specified a role for the ASEAN Agreement (CBTA) that will have to align eventually with Secretariat in refining the roadmap in the course of its that of ASEAN. However, as observed in the operational implementation, and in guiding various EAGA initiatives level review, subregional programs can still play a role in through linkages with the appropriate ASEAN bodies. The software connectivity by implementing administrative ASEAN Secretariat, however, has not yet fully performed improvements or building capacity (e.g., at selected border- this role. crossing points) to facilitate the flow of goods and people for as long as these improvements are consistent with In the review of cooperation in transport and energy, and regional and/or global norms. The BIMP-EAGA and IMT- transport and trade facilitation, there was also evidence GT initiatives in customs, immigration, and quarantine of links in various forms. Some links were purposive or systems are good examples of how the subregional programs intended, such as the BIMP-EAGA Memorandum of can perform this role. Understanding (MOU) on Transit and Interstate Transit of Goods as a test bed for the ASEAN Framework Agreement for the Facilitation of Goods in Transit. Others were Institutional Links random or unintended, such as segments of the ASEAN Highway Network (AHN) coinciding with segments of the Strengthening existing and pursuing potential links between subregional corridors. Links were also manifested in the ASEAN and the three subregional programs in transport form of physical connectivity expansion, such as the GMS and energy, and transport and trade facilitation will plans to develop railway routes beyond the Singapore− require commensurate improvements in the institutional Kunming Rail Link (SKRL). Similar to the pattern mechanisms and arrangements for coordinating related observed for the program-wide strategies, links at the activities in ASEAN and the subregional program.91 operational level have tended to be more purposive after Accordingly, the study examined coordination issues and the AEC launch in 2007. This was evident especially in the constraints, and broadly identified possible measures area of transport and trade facilitation, where a number of for improving the interface between ASEAN and the ASEAN and subregional agreements and protocols began subregional programs. aligning with one another after 2007. Previous institutional assessments of ASEAN and the The review of selected sectors also indicates that ASEAN subregional programs dealt primarily with in-program and the subregional programs have unique roles to improvements rather than inter-program coordination. The play in pursuing shared goals. For one, the subregional institutional assessment in this study used these program- corridors have played an important role in translating the goal of ASEAN physical connectivity into specific area 91 These may also be applicable to other sectors and areas of cooperation covered by contexts through the implementation of corridor-specific ASEAN and the three subregional programs.

84 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt specific assessments as the starting point for the review of various subregional activities, coordinating the position coordination issues and constraints between ASEAN and of concerned agencies on matters to be taken up in senior the subregional programs. It was complemented by a broad officials’ and ministerial meetings, and interfacing with assessment of in-country institutional mechanisms and local authorities and the private sector. Although the need arrangements for coordinating activities involving ASEAN to have a strong national secretariat or coordinator is well- and the subregional programs. recognized, many of these offices lack the resources and capacity to perform their roles effectively. Moreover, not Assessments of the institutional mechanisms and all sector ministries concerned have designated focal units arrangements in ASEAN, GMS, BIMP-EAGA, and IMT- or officials within their respective organizations, resulting GT have been conducted at various times in the past. in a lack of continuity and low levels of participation in These reviews have led to certain changes in organizational working group meetings and activities, as well as inadequate structures and mandates of regional and/or subregional monitoring of subregional initiatives. bodies over time, with the latest being the adoption by BIMP-EAGA of a new organizational structure effective The mechanisms for intra-program coordination among 1 January 2013. A review of the ASEAN Secretariat is concerned ministries and agencies (e.g., transport, energy, ongoing. These periodic institutional assessments have and environment) vary by country, with many convening been helpful in ensuring that existing structures and interagency consultation meetings when necessary. There processes remain effective in supporting regional and/or are more formal arrangements in some countries, such as subregional goals. the AEC national coordinating committees in Cambodia and Thailand chaired by their respective ministers of All ASEAN Member States are members of at least one other commerce. In addition, Cambodia organized the National regional and/or subregional program. These interlocking Committee for ASEAN Affairs chaired by the Prime memberships in different but related subregional programs Minister, with the Deputy Prime Minister and minister of require close in-country coordination. While efforts to foreign affairs serving as vice chair. improve coordination at the regional and subregional levels are important, the first line of defense against a fragmented While in-country institutional arrangements for intra- and uncoordinated approach to regional and subregional program coordination are generally well-defined, the same development is at the country level. Moreover, the effective is not true for in-country coordination (inter-program) implementation of specific regional and/or subregional among or across regional and subregional programs. This initiatives requires that they be integrated into the national issue pertains not only to coordination among ministries planning, policy, and budget processes. Good in-country involved in these programs, but also within ministries. coordination is critical to achieving concrete results in Some of the factors constraining in-country coordination regional and subregional cooperation. efforts include a lack of resources, limited technical capacity, historical antecedents and inertia from past The analysis of in-country mechanisms and arrangements practice, and the political factors and personalities involved for coordinating ASEAN, GMS, BIMP-EAGA, and at one time or another. Inter-program coordination has IMT-GT shows that except for ASEAN, for which in- been addressed by member countries in various ways. country coordination resides uniformly with the foreign Many member countries have taken an informal, ad hoc affairs ministry, there are wide variations in terms of the approach whereby interagency meetings are convened designated focal ministers and agencies that are responsible when an important issue comes up or when the need for coordinating each of the three subregional programs. arises. Efforts have also been taken by some countries to There have also been changes over time involving focal institutionalize mechanisms for coordinating regional and ministries and ministers. The arrangements adopted by subregional programs on a government-wide basis, such as a member country at any one time have depended on the newly constituted Council for Regional Cooperation the specific situation in each country. An organizational in the Philippines chaired by the secretary of foreign affairs, approach effective in one country may not necessarily be and the high-level coordinating committee for regional and effective in another country due to different institutional subregional cooperation under the chair of the respective settings. Prime Ministers of Cambodia, Thailand, and Viet Nam.

The national secretariats play a critical role in coordinating At the regional and subregional levels, inter-program regional and subregional programs. Their functions range coordination between ASEAN and the GMS, BIMP- from maintaining liaisons with the subregional secretariats EAGA, and IMT-GT has been inadequate, despite some to arranging the participation of national agencies in steps that have been taken to improve coordination and subregional meetings, disseminating information on the MPAC’s recognition of such need. Efforts that have

summary of major findings 85 been initiated so far to strengthen the links have had (ii) national, regional, and subregional secretariats require limited results. For instance, BIMP-EAGA has invited the sufficient competencies and mandates to perform their ASEAN Secretariat to its ministerial and senior officials’ roles effectively in promoting links. meetings, but this has been confined to the exchange of general information. Although the GMS, BIMP-EAGA, The report’s key findings can be categorized as follows: and IMT-GT have been recognized as ASEAN subregions in a number of official documents, the ASEAN Secretariat (i) pursuing opportunities for strengthening and has hesitated to be proactively involved in the subregional expanding links, programs in the absence of a clear administrative mandate. (ii) strengthening organizational structures and coordination mechanisms at the in-country, The study identified the following issues and concerns subregional, and regional levels, and involving institutional mechanisms and arrangements that (iii) enhancing institutional capacity. cut across regional and subregional programs:

(i) Improved in-country coordination of the various Pursuing Opportunities for Strengthening initiatives in member countries—particularly for the and Expanding Links GMS, BIMP-EAGA, and IMT-GT programs—can help ensure consistency and maximize the benefits of Based on this study’s review of selected connectivity areas, a member countries’ participation in various regional number of broad measures could be taken to further promote and subregional programs. or expand links. For example, ASEAN might (i) take (ii) Issues and constraints confronting the central into account subregional corridor development plans in secretariats include capacity constraints in the ASEAN further prioritizing the ASEAN Highway Network routes Secretariat, legal issues and capacity constraints in for upgrading and expansion, (ii) address gaps involving the BIMP-EAGA and IMT-GT secretariats, and the ferry links and cross-border highways links, (iii) strengthen role of ADB in financing and managing the GMS coordination in the software elements of railway and Secretariat. The unevenness in the resource capacities energy grid connectivity, or (iv) consider lead roles for and legal mandates of central secretariats could affect BIMP-EAGA and IMT-GT in pursuing the ASEAN roll- the overall quality of coordination among them. on/roll-off (RoRo) network. For their part, the subregional (iii) There are significant challenges in project development programs might (i) promote and deepen their roles in pilot and implementation, particularly in BIMP-EAGA testing transport and trade facilitation, (ii) expand railway and IMT-GT, which are partly being addressed by connectivity beyond the Singapore−Kunming Rail Link, the preparation of their implementation blueprints. (iii) align the Cross-Border Transport Agreement to the However, the capacity for dealing with these challenges new ASEAN Customs Transit System, or (iv) expand the is severely constrained. BIMP-EAGA memorandum of understanding on non- (iv) The need to improve monitoring systems is a common conventional sized ships to IMT-GT. concern. Central secretariats differ in their monitoring systems and capacities. The ASEAN Secretariat uses a scorecard for monitoring the progress of measures and Strengthening Organizational Structures actions, which is largely based on process compliance. and Coordination Mechanisms Meanwhile, the subregional programs have started to go beyond progress monitoring and have initiated Well-functioning in-country coordination mechanisms steps toward a results-based framework. can help avoid fragmentation, promote better resource allocation, and ensure alignment of national priorities with regional and subregional commitments. Such Strengthening Strategic mechanisms involve (i) an assessment of the adequacy of existing in-country arrangements and mechanisms within and Institutional Links and among ministries for coordinating the initiatives of ASEAN and the three and other subregional programs, While there are wide variations in in-country systems (ii) the identification of areas and actions for improvement, and subregional institutional structures and mechanisms, and (iii) the implementation of measures to strengthen there are two universal factors for forging effective strategic arrangements and mechanisms on a sustained basis. and institutional links: (i) well-functioning in-country coordination is a necessary condition for promoting Focal points for overall coordination are already well- effective links at the regional and subregional levels; and established. Additional focal points—such as a ministry

86 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt or agency, department, or even specific official—for each The mechanism could be a forum for discussing plans for regional or subregional initiative by sector of cooperation, specific sectors, issues, or themes, and may not necessarily where designations have not yet been made, could further be a formal structure or institutional link. A similar strengthen coordination. A periodic coordination meeting mechanism would be the regular conduct of workshops including the secretariats of ASEAN, the GMS, BIMP- and seminars covering specific issues facing ASEAN, GMS, EAGA, and IMT-GT could serve as a forum to exchange BIMP-EAGA, and IMT-GT to exchange experiences and information on recent developments, and identify areas lessons learned. or specific activities where links could be promoted. The secretariats would then convey to the mandated bodies the relevant information discussed at the coordination meeting. Enhancing Institutional Capacities Furthermore, establishing regular links between the ASEAN Secretariat and the subregional program secretariats and/or This study also identified the importance of strengthening their related sector groupings, particularly for BIMP-EAGA the capacity of the national and subregional secretariats and IMT-GT, would involve the institutionalization of for coordinating regional and subregional programs based certain roles on the part of both the ASEAN Secretariat and on the mandates given by members of the programs. the subregional program secretariats beyond conducting Specifically, this might include improving secretariats’ joint meetings. The proposed links could also have a (i) conduct of analytical work on common concerns and number of variants, for example, they could (i) extend to cross-cutting issues among the sectors of cooperation; sector bodies of ASEAN and the subregional programs, (ii) preparation of technical reports, in coordination with (ii) be comprehensive (covering all sectors) or selective concerned ministries to assist relevant bodies in making (covering only connectivity sectors), and (iii) be continuing informed decisions; (iii) provision of updated information (regular joint meetings) between sector bodies or issue- on developments in the region and on various regional based (i.e., focused only on a specific task). cooperation programs; (iv) appraisal of projects; and (v) monitoring of progress and results. Mechanisms for sharing and discussing regional and subregional master plans, roadmaps, and sector studies as planning and programming inputs could also be beneficial.

summary of major findings 87 VI. conclusions

he mapping of links between the Association subregional, and regional institutions and mechanisms of Southeast Asian Nations (ASEAN) and from becoming effective drivers of the integration process. the three subregional programs—the Greater TMekong Subregion (GMS), Brunei Darussalam− Without being prescriptive, this study has attempted to Indonesia−Malaysia−Philippines East ASEAN Growth highlight the importance of improving the interface between Area (BIMP-EAGA), and Indonesia−Malaysia−Thailand ASEAN and the subregional programs. ASEAN, GMS, Growth Triangle (IMT-GT)—has yielded a number of BIMP-EAGA, and IMT-GT—individually, bilaterally, or significant insights that could help further drive the process collectively—could consider pursing any specific measure or of integration envisaged under the ASEAN Economic combination of measures to enhance strategic program and Community (AEC). Strategy and program links have institutional links discussed in this report only in so much been increasingly converging since the launch of the AEC as they can help realize integration goals and aspirations. in 2007. Despite the randomness of many of these links, This study also cautions that countries should be mindful the potential for making them more purposive in key of the resource and capacity implications, as well as the two connectivity sectors has been illustrated by this report. critical success factors for any such initiative to work: (i) a As shown in the strategy and program levels review, both well-functioning in-country link is a necessary condition ASEAN and the subregional programs have unique roles for promoting effective links at the regional and subregional to play in fostering the links. ASEAN’s role in policy levels, and (ii) the competencies and mandates of national, coordination, harmonization, and standards setting is key regional, and subregional secretariats will impact on their to pacing the integration process, given its wide-ranging performance in promoting links. If these two factors are economic and political mandate and legal character. The not addressed, merely linking structures at the regional and subregional programs provide the geographic context in subregional levels might have limited outcomes. which these policies and standards are applied and refined, given specific development constraints. It is evident that The promotion of strategic programs and institutional links the momentum for linking with AEC goals has started. The between ASEAN and the three subregional programs is not challenge is now to build upon and sustain this momentum. an end in itself. Rather, it is a means that could benefit ASEAN and the subregional programs collectively as well Institutional arrangements at the in-country and regional as individually. and subregional levels will need to keep pace with the demands of increased coordination. The institutional (i) For ASEAN, the progress and achievements of the review has revealed that existing institutional arrangements subregional programs related to the AEC targets could do not lend themselves adequately to the type of interactive help improve its performance on the AEC scorecard. and flexible forms of interface that are needed to cope This approach is reasonable because ASEAN could with the rapid and complex developments in the region. (i) invoke the “minus X” principle for subregional Rigidities in institutional structures and mechanisms, lack projects, (ii) use the subregional programs as of commitment to strengthening national institutions, implementing partners in operationalizing ASEAN- and overall resource constraints are hindering in-country, wide agreements and initiatives, and (iii) pilot test new

88 regional and subregional program links: mapping the links between asean and the gms, bimP-eaga, and imt-gt agreements and initiatives through the subregional the impact of regional and subregional programs programs. ASEAN’s strength in rules and policy- and projects. Improved inter-program coordination based cooperation could also be complemented by could ultimately benefit member countries through concrete, action-oriented projects and programs at the increased efficiency and a better division of labor in subregional level. the deployment of human and financial resources; by providing a clearer perspective of how the subregional (ii) For GMS, BIMP-EAGA, and IMT-GT, stronger frameworks fit into the larger ASEAN framework ties with ASEAN could strengthen the support of of cooperation; and by promoting more avenues central governments to their respective programs for obtaining additional development assistance, and projects. Regularizing their links with ASEAN, especially for the CLMV countries—Cambodia, the operationally and technically, could also help increase Lao People’s Democratic Republic, Myanmar, and their interaction with ASEAN development partners Viet Nam—and other lagging areas, such as those in in the integration process and subregional activities. BIMP-EAGA and IMT-GT. For the three subregional programs, using policies and rules agreed to by ASEAN Member States would It is hoped that this study will serve as an entry point provide a high degree of confidence about their for ASEAN and the three subregional programs to come reliability and sustainability. It would also save the together and discuss how to better improve linkages among subregional programs from “starting from scratch” themselves. This study has identified areas in the connectivity and avoid inconsistencies that may eventually sectors where potential links could be further developed, need correction. They could also tap the technical with the relevant national and regional secretariats taking expertise and experience of the ASEAN sector bodies the lead in initiating actions. Some actions may be easy to and network of learning institutions, and link up pursue (e.g., designation of focal points), while others may with ASEAN-wide private sector organizations in involve more complex decisions (e.g., regularizing links). promoting investments. A follow-up analysis, involving sector-specific or country- specific assessments, may also be warranted depending on (iii) For member countries, improvements in in-country the type and extent of coordination and convergence that is mechanisms and arrangements for coordination desired. The additional resources to support any follow-up could ensure consistency and continuity in the actions, as well as those required for capacity building, also positions being taken by country delegations, avoid need to be identified. In this manner, improving links will unnecessary overlaps and duplication of activities, be an ongoing process that underpins the larger efforts of strengthen alignment between national and regional accelerating economic integration in ASEAN. or subregional strategies and priorities, and enhance

conclusions 89 Appendixes

Appendix A

Selected ASEAN Highway Network Sections in the ASEAN Strategic Transport Plan Located in Subregional Corridors in the GMS, BIMP-EAGA, and IMT-GT Affected or Related Priority ASEAN Highway Network Priorities under the ASEAN Strategic Routes and Corridors in ASEAN, Transport Plan (Brunei Action Plan) Status and Length GMS, BIMP-EAGA, and IMT-GT Brunei Darussalam AH150 Sg. Tujuh-Kuala Lurah, Pumi Class I (66.0 km) West Borneo Economic Corridor 168.0 (Brunei Darussalam Check Class II (98.8 km) (WBEC) kilometers Point)–Labu (Brunei Darussalam Class III (3.2 km) (km) Check Point) Cambodia AH1 Poi Pet–Sisophon–Phnom Penh– Class II (573.0 km) Southern Economic Corridor (SEC) 573.0 km Bavet AH11 Sihanoukville–Phnom Penh– Class II (762.8 km) SEC 762.8 km Kamppong Cham–Stung Treng– Trapeangkreal AH123 Cham Yeam–Koh Kong–Phum Class III (151.0 km) SEC 151.0 km Daung Bridge–Sre Ambel– Chamkar Luong Indonesia AH25 Banda Aceh–Medan–Pekanbaru– Class I (33.7 km) EC3 2,783.3 km Jambi–Palembang–Lampung Class II (1,535.2 km) ASEAN Strategic Transport Plan Bakauheni–Merak Class III (1,188.4 km) (ASTP): TTR Upgrade (141.55 km) AH150 Serudong–Samarinda– Class II (359.0 km) ASTP: Upgrade (1,762.3 km) 3,073.0 km Banjarmasin–Palangkaraya Class III (1,530.0 km) (Entikong)–Pontianak Below Class III (1,184.0 km) AH151 Tebingtinggi–Padang–Bangko– Class II (357.0 km) EC3 1,719.0 km Lubuk Linggau–Terbanggi Besar Class III (1,184.0 km) ASTP: Upgrade (611.9 km) Below Class III (178.0 km) Lao PDR AH3 Boten–Naeuy–Houyxay Class II (227.6 km) North–South Economic Corridor 227.6 km (NSEC) AH12 Nateuy–Oudomxai–Luang Class III (410.3 km) ASTP: TTR Upgrade (293 km) 703.3 km Prabang–Vientiane Below Class III (293.0 km) AH15 Thakhek–Ban Lao– Class III (34.8 km) ASTP: TTR Upgrade (98 km) 132.8 km Keoneau Below Class III (98.0 km) AH16 Savannakhet–Seno–Densavanh Class III (241.1 km) East–West Economic Corridor 241.1 km (EWEC) AH131 Thakhek–Kiamouya Class III 41.7 km) ASTP: Upgrade (96 km) 137.7 km Below Class III (96.0 km) Continued on next page

90 Toward Closer Strategic, Program and Institutional Links Among Asean, Gms, Bimp-Eaga and Imt-Gt Appendix A continued Affected or Related Priority ASEAN Highway Network Priorities under the ASEAN Strategic Routes and Corridors in ASEAN, Transport Plan (Brunei Action Plan) Status and Length GMS, BIMP-EAGA, and IMT-GT Malaysia AH132 Phia Fai–Ban Het Class III (113.0 km) ASTP: Upgrade (126 km) 239.0 km Below Class III (126.0 km) AH2 Bukit Kayu Hitam–Kuala Primary (795.0 km) EC1 821.0 km Lumpur–Senai Utara–Second Class I (26.0 km) Linkage AH18 Rantau Panjang–Kuantan–Johor Class I (41.0 km) EC1 756.6 km Baru Class II (715.6 km) AH141 Port Klang–Kuala Lumpur– Primary (265.3 km) EC2 272.3 km Kuantan Class I (7.0 km) AH150 Serian–Kuching–Tebedu–Serien– Class II (1,095.6 km) WBEC 1,994.6 km Sg.Tujuh, Kuala Lurah–Runi, Class III (859.0 km) ASTP: Upgrade (40 km) Labu–Kota Kinabalu–Seredong Below Class III (40.0 km) Myanmar AH1 Tamu–Mandalay–Meiktila– Class I (80.0 km) EWEC 1,656.0 km Yangon–Bago–Payagyi–Thaton– Class III (1,206.0 km) ASTP : TTR Upgrade (141.5 km) Myawaddy Below Class III (379.0 km) AH2 Meiktila–Loilem–Kyaing Tong– Class I (10.0 km) ASTP: TTR Upgrade (593 km) 807.0 km Tachilek Class III (349.0 km) Below Class III (448.0 km) AH3 Mongla–Kyaing Tong Class III (93.0 km) ASTP: TTR Upgrade (93 km) 93.0 km AH111 Thibaw–Loilem Below Class III (239.0 km) ASTP : Upgrade 239.0 km (239 km) AH112 Thaton–Mawlaimyine– Class II (19.0 km) EWEC 1,145.0 km Thanbuzayat–Ye–Dawei–Lehnya, Class III (84.0 km) ASTP: Missing Link (60 km) Kamaukgyi, Lehnya–Khong Loy Below Class III (982.0 km) ASTP: Upgrade (1,085 km) Class III (84.0 km) Missing Link: 60.0 km Below Class III (982.0 km) AH123 Dawei–Maesameepass Missing Link: 141.0 km ASTP: Missing Link (141 km) 141.0 km Philippines AH26 Laoag City-–Agabag–Manila– Primary (71.0 km) Greater Sulu Sulawesi Corridor 3,266.27 km Daet–Surigao–General Santos– Class 1 (196.08 km) (GSSC) Malabang–Zamboanga City Class II (8.36 km) Class III (2,990.8 km) Thailand AH1 Mae Sot–Tak–Nakhon Sawan– Primary (44.6 km) EWEC 715.5 km Bangkok–Hin Kong–Kabinburi– Class I (531.3 km) SEC Aranyaprathet Class II (139.5 km) AH2 Tachilek–Mae Sai–Chiang Rai– Primary (110.4 km) NSEC 1,913.6 km Tak-Bangkok–Pranburi–Hat Yai– Class I (1,800.9 km) Chang Lon Class II (2.2 km) AH3 Chiang Khong–Chaing Rai Class I (11.4 km) NSEC 121.2 km Class II (50.6 km) Class III (59.2 km) AH12 Nongkai–Udonthani–Khon Kaen– Class I (571.3 km) EWEC 571.3 km Nakhon Ratchasima–Hin Kong AH13 Huai Kon–Phitsanulok–Nakhon– Class I (343.6 km) EWEC 550.5 km Sawan Class II (206.9 km) AH16 Tak–Phitsanulok–Lom Sak–Khon Class I (324.4 km) NSEC–EWEC Interchange 703.4 km Kaen–Mukdahan Class II (322.7 km) EWEC Class III (56.4 km) AH18 Hat Yai–Sungai Golok Class I (311.1 km) EC1 311.1 km AH121 Mukdahan–Suwanaphum– Class I (90.4 km) EWEC 507.6 km Buriram–Aranyaprathet–Sa Kaeo Class II (370.0 km) Class III (47.2 km) AH123 Myanmar Border–Angkok– Primary (152.7 km) SEC 634.2 km Chonburi–Chantaburi–Hat Lek Class I (343.6 km) Class II (122.8 km) Class III (15.1 km) Continued on next page Selected ASEAN Highway Network Sectionsappendix 91 Appendix A continued Affected or Related Priority ASEAN Highway Network Priorities under the ASEAN Strategic Routes and Corridors in ASEAN, Transport Plan (Brunei Action Plan) Status and Length GMS, BIMP-EAGA, and IMT-GT Viet Nam AH1 Huu Ngi Quan–Ha Noi–Vot Primary (32.3 km) EWEC 1,803.0 km (South of Vinh) –West Vung Ang Class I (88.5 km) SEC Port–Dong Ha–Da Nang–West Class II (1,323.6 km) of Hoi An–QUang Ngai–Nha Class III (358.6 km) Trang–Bien Hoa–Ho Chi Minh City–Moc Bai AH13 Tay Trang–Dien Bien–Tuan Giao– Class I (8.2 km) ASTP: Upgrade (215 km) 499.5 km Son La–Hoa Binh–Ha Noi Class III (279.3 km) NSEC Below Class III (215.5 km) AH14 Lao Cai–Doan Hung–Ha Noi–Hai Class I (156.1 km) 427.5 km Phong Class II (30.8 km) Class III (115.6 km) Below Class III (183.0 km) AH16 Lao Bao–Dong Ha Class II (84.0 km) EWEC 84.0 km AH17 West of Hoi An–Thanh My–Kon Class I (162.1 km) SEC 958.5 km Tum–Pleiku–Ban Me THout–Chon Class II (737.4 km) Thanh–An Suong–Bien Hoa– Class III (59.0 km) Vung Tau AH132 Bo Y–Dak To–Kon Tum–Quang Class II (10.0 km) ASTP: Upgrade (160 km) 198.2 km Ngai Class III (20.0 km) Below Class III (160.0 km) AH = ASEAN Highway, ASEAN = Association of Southeast Asian Nations, BIMP-EAGA = Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area, CIMT = Centre for IMT-GT Subregional Cooperation, EC = economic corridor, EC1 = Economic Corridor 1: Extended Songkhla–Penang–Medan Corridor (Nakhon Si Thammarat–Phatthalung–Songkhla–Yala–Pattani–Penang-Medan), EC2 = Economic Corridor 2: Straits of Malacca Economic Corridor (also referred to as Trang–Satun–Perlis–Penang–Port Klang–Malacca Connectivity Corridor), EC3 = Economic Corridor 3: Banda Aceh–Medan–Pekanbaru–Palembang Economic Corridors, FC = Facilitation Centre, GMS = Greater Mekong Subregion, IMT-GT = Indonesia–Malaysia–Thailand Growth Triangle, Lao PDR = Lao People’s Democratic Republic, TTR = transit transport route. Note: Color Codes: Purple = ASEAN; Blue = GMS; Pink = BIMP-EAGA; Green = IMT-GT. Sources: Data on AHN: Economic Research Institute for ASEAN and East Asia. 2010. ASEAN Strategic Transport Plan Final Report. Jakarta; Information on GMS Economic Corridors: ADB. 2010. Strategy and Action Plans of EWEC, NSEC, and SEC. Manila; Information on IMT-GT Economic Corridors: CIMT. 2012. IMT-GT Implementation Blueprint 2012–2016. Putrajaya; and Information on BIMP-EAGA Economic Corridors: BIMP-FC. 2012. BIMP-EAGA Implementation Blueprint 2012–2016. Kota Kinabalu.

92 Towardappendix Closer A Strategic, Program and Institutional Links Among Asean, Gms, Bimp-Eaga and Imt-Gt Appendix B: Committees under the Purview of ASEAN Economic Ministers

A: ASEAN Free Trade Area (AFTA) Council

A.1 Directors-General of Customs A.1.1 Expert Committee on Customs Matters A.1.2 ASEAN Coordinators of Customs Training Centers

A.2 Senior Economic Officials Meeting A.2.1 Working Group on Industrial Cooperation A.2.1.1 ASEAN−Ministry of Trade and Industry (MITI) Economic and Industrial Cooperation Committee (AMEICC) on automotive A.2.1.2 AMEICC Chemical A.2.1.3 AMEICC Electronics A.2.1.4 AMEICC Textile and Garment

A.2.2 Working Group on Intellectual Property Cooperation A.2.2.1 Expert Group on Patent A.2.2.2 Expert Group on Trademark

A.2.3 Working group on Small and Medium Enterprise (SME) A.2.3.1 AMEICC–Supporting industries and rural industry

A.2.4 ASEAN Expert Working Group on World Trade Organization (WTO)

A.2.5 Coordinating Committee on the Implementation on the Common Effective Preferential Tariff (CEPT) for AFTA (CCCA)

A.2.6 Coordinating Committee on Services (CCS) A.2.6.1 Air transport A.2.6.2 Business Services A.2.6.3 Construction A.2.6.4 Financial Services A.2.6.5 Maritime Transport A.2.6.6 Telecommunication A.2.6.7 Tourism

A.2.7 ASEAN Consultative Committee on Standard and Quality (ACCSQ) A.2.7.1 Working Group on Mutual Recognition Arrangement (MRA) A.2.7.2 Working Group on Regulation and Accreditation A.2.7.3 Working Group on Standards and Conformity Assessment A.2.7.4 Working Group on Information A.2.7.5 Working Group on Legal Metrology A.2.7.6 Product Working Group on Cosmetic A.2.7.7 Product Working Group on Pharmaceutical A.2.7.8 Product Working Group on Electro technical

A.2.8 E-ASEAN Task Force A.2.8.1 E-ASEAN Working Group A.2.8.1.1 Sub-Working Group on Certification Authority A.2.8.1.2 Sub-Working Group on Funding A.2.8.1.3 Sub-working group on legal infrastructure

appendix 93 B: Cooperation in Investment

B.1 ASEAN Investment Area Council (AIA Council) B.1.1 Coordinating Committee on Investment (CCI) B.1.1.1 Working group on Foreign Direct Investment (FDI) Statistics

C: Cooperation in Transport

C.1 ASEAN Transport Ministers Meeting (ATM) C.1.2 Senior Transport Officials Meeting (STOM) C.1.2.1 Special Working Group on Singapore−Kunming Rail Link Project C.1.2.2 STOM-National Tourism Organizations (NTOs) Cruise Working Group C.1.2.3 ASEAN−India Working group on Transport and Infrastructure C.1.2.4 ASEAN−Closer Economic Relations (CER) Informal Consultation C.1.2.5 Transport Facilitation Working Group C.1.2.6 Air Transport Working Group C.1.2.6.1 Air transport sectoral negotiation C.1.2.6.2 Economic Cooperation Sub-working Group C.1.2.6.3 Technical Cooperation Sub-working Group C.1.2.7 Land Transport Working Group C.1.2.7.1 Highways Sub-working Group C.1.2.7.2 Road Transport and Road Safety Sub-working Group C.1.2.7.3 Railway Sub-working Group C.1.2.8 Maritime Transport Working Group C.1.2.8.1 Port Sub-working Group C.1.2.8.2 Shipping Sub-working Group

D: Cooperation in Telecommunication

D.1 ASEAN Telecommunication Ministers Meeting (TELMIN) D.1.1 ASEAN Telecommunication Regulators’ Council (ARTC) D.1.2 ASEAN Telecommunication Senior Officials Meeting (TELSOM) D.1.2.1 Working Group on ASEAN Information Infrastructure D.1.2.2 Working Group on Capacity Building Programmes D.1.2.3 Working Group on Universal Access and Digital Divide D.1.2.4 Working Group on Intra-ASEAN Trade and Investment D.1.2.5 Working Group on Internet

E: Cooperation in Energy

E.1 ASEAN Council on Petroleum (ASCOPE) E.2 ASEAN Center for Energy (ACE) E.3 ASEAN Ministers on Energy Meeting (AMEM) E.3.1 Senior Officials Meeting on Energy (SOME) E.3.1.1 Heads of ASEAN Power Utilities/Authorities (HAPUA) E.3.1.2 EE&C-SSN (Energy Efficiency and Conservation Sub-sector Network) E.3.1.3 NRSE-SSN (New and Renewable Sources of Energy Sub-sector Network) E.3.1.4 AFOC (ASEAN Forum on Coal) E.4 SOME-METI consultations

94 Towardappendix Closer B Strategic, Program and Institutional Links Among Asean, Gms, Bimp-Eaga and Imt-Gt F: Cooperation in Tourism

F.1 Meeting of ASEAN + 3 Tourism Ministers F.2 Meeting of ASEAN Tourism Ministers F.2.1 ASEAN National Tourism Organizations (NTOs) Meeting F.2.1.1 STOM-NTOs Cruise Working Group F.2.1.2 Meeting on ASEAN Joint Marketing Programme “ASEAN as a Single Destination” F.2.1.3 Meeting of ASEAN Communication Team for Tourism F.2.1.4 Meeting of the ASEAN Task Force on Tourism Investment F.2.1.5 Meeting of the ASEAN Task Force on Tourism Manpower

G: Cooperation in Finance

G.1 ASEAN Finance Ministers Meeting (AFMM) G.1.2 ASEAN Insurance Regulators Meeting (AIRM) G.1.3 ASEAN Central Bank Forum G.1.4 ASEAN Finance and Central Bank Deputies Meeting (AFDM) G.1.4.1 ASEAN Directors General on Customs G.1.4.1.1 Experts Committee on Customs Matters G.1.4.2 Working Group of the AFDM G.1.4.2.1 Working Committee on Capital Market Development G.1.4.2.2 Working Committee on Financial Sector Liberalization G.1.4.2.3 Working Committee on Tax and Public Finance G.1.5 ASEAN Finance and Central Bank Deputies Meeting (AFDM) + 3 G.1.5.1 Working group on Bilateral Swap arrangement G.1.5.2 Study group on Regional Cooperation

Committees under the Purview of ASEAN Economic Ministersappendix 95 Appendix C:

Memorandum of Understanding Between The Association of Southeast Asian Nations and The Asian Development Bank

96 Toward Closer Strategic, Program and Institutional Links Among Asean, Gms, Bimp-Eaga and Imt-Gt Appendix C continued

Memorandum of Understandingappendix 97 Appendix C continued

98 Towardappendix Closer C Strategic, Program and Institutional Links Among Asean, Gms, Bimp-Eaga and Imt-Gt Appendix C continued

Memorandum of Understandingappendix 99 Appendix C continued

100 appendiTowardx Closer C Strategic, Program and Institutional Links Among Asean, Gms, Bimp-Eaga and Imt-Gt Appendix C continued

Memorandum of Understandingappendix 101 Appendix C continued

102 appendiTowardx CloserC Strategic, Program and Institutional Links Among Asean, Gms, Bimp-Eaga and Imt-Gt Appendix C continued

Memorandum of Understandingappendix 103 Appendix C continued

104 appendiTowardx Closer C Strategic, Program and Institutional Links Among Asean, Gms, Bimp-Eaga and Imt-Gt Appendix C continued

Memorandum of Understandingappendix 105 Appendix D: Business Organizations Affiliated with ASEAN

i. ASEAN Airlines Meeting x. ASEAN Furniture Industries Council (AFIC) ii. ASEAN Alliance of Health Supplement Association xi. ASEAN Insurance Council (AIC) (AAHSA) xii. ASEAN Intellectual Property Association (ASEAN IPA) iii. ASEAN Automotive Federation (AAF) xiii. ASEAN International Airports Association (AAA) iv. ASEAN Bankers Association (ABA) xiv. ASEAN Iron and Steel Industry Federation v. ASEAN Business Advisory Council (ASEAN-BAC) xv. ASEAN Pharmaceutical Club vi. ASEAN Business Forum (ASEAN-BF) xvi. ASEAN Tourism Association (ASEANTA) vii. ASEAN Chamber of Commerce and Industry xvii. Federation of ASEAN Economic Associations (FAEA) (ASEAN-CCI) xviii. Federation of ASEAN Shippers’ Council viii. ASEAN Chemical Industries Council xix. US-ASEAN Business Council ix. ASEAN Federation of Textiles Industries (AFTEX)

ASEAN = Association of Southeast Asian Nations, US = United States. Source: ASEAN Secretariat website (http://www.aseansec.org/144422.htm).

Appendix E: Review of ADB-Supported Capacity Building Technical Assistance to ASEAN, GMS, BIMP-EAGA, and IMT-GT

Introduction

This note presents and examines data on the capacity building technical assistance (TA) projects in the Association of Southeast Asian Nations (ASEAN), Greater Mekong Subregion (GMS), Brunei Darussalam–Indonesia–Malaysia–Philippines East ASEAN Growth Area (BIMP-EAGA), and Indonesia–Malaysia–Thailand Growth Triangle (IMT-GT) funded and/or administered by the Asian Development Bank (ADB). Its purpose is to determine how, and to what extent, the capacity building needs of the national and central secretariats of the four initiatives have been addressed in the past. The TA projects included are those identified for capacity building and training, and those directly supporting the secretariats. There may be some understatement of the magnitude of these projects, as some TA projects with broader objectives may have capacity building and training components. The understatement is, however, not likely to be significant, because built-in capacity building components of TA projects with broader objectives tend to be a small proportion of the total TA budgets.

ADB-Supported Technical Assistance to ASEAN, GMS, BIMP-EAGA, and IMT-GT

The table shows the total amount of ADB-supported TA projects to the four initiatives from 1982 to 2011 (as of 15 August 2011).1 The amounts utilized for capacity building and supporting the national and central secretariats of each of the initiatives are also indicated. The following observations can be made:

(i) The GMS Program accounted for 76.2% of the total TA amount, followed by ASEAN (15.0%), and BIMP-EAGA and IMT-GT (8.8%). (ii) TA projects for capacity building and secretariat support accounted for 21.9% of the total TA amount; the corresponding figure for ASEAN is 30.0%; for GMS, 17.7%; and for BIMP-EAGA and IMT-GT, 44.5%. (iii) Cofinancing (Others in the table) is the largest for the GMS Program, both for all TA projects and for capacity building and secretariat support (63.0% and 48.5% for GMS; 37.0% and 20.5% for ASEAN; and 14.8% and 26.7% for BIMP-EAGA and IMT-GT).

1 Project preparatory TA projects are excluded. The TA projects for BIMP-EAGA and IMT-GT were combined, as some of the projects addressed both subregional groupings and the actual allocation of the TA budgets were not clear-cut.

106 Toward Closer Strategic, Program and Institutional Links Among Asean, Gms, Bimp-Eaga and Imt-Gt Appendix E continued

Capacity Building Technical Assistance by Regional/Subregional Grouping and Source of Funds, as of 15 August 2011 ($’000) Region/Subregion TASF JSF Special Funds Others TOTAL ASEAN 9 ,044 8,550 2,200 12,577 32,371 of which capacity building 3 ,447 3,100 1,200 2,000 9,747 GMS 28,718 28,440 1,700 104,336 163,194 of which capacity building 11,025 4,525 450 12,928 28,928 BIMP-EAGA/IMT-GT 12,941 2,796 300 2,850 18,887 of which capacity building 6,171 0 0 2,250 8,421 GRAND TOTAL 50,703 39,786 4,200 119,763 214,452 of which capacity building 20,643 7,625 1,650 17,178 47,096 ASEAN = Association of Southeast Asian Nations, BIMP-EAGA = Brunei Darussalam−Indonesia−Malaysia−Philippines East ASEAN Growth Area, GMS = Greater Mekong Subregion, IMT-GT = Indonesia−Malaysia−Thailand Growth Triangle, JSF = Japan Special Fund, TASF = Technical Assistance Special Fund. Source: ADB.

These numbers do not show the whole picture; thus, it will be necessary to examine the specific thrusts of the individual TA projects. A review of the TA projects for capacity building and secretariat support shows the following:

(i) For ASEAN, a great majority of the capacity building TA projects were for the strengthening of financial surveillance and related issues, which accounted for 65% of the total cost of all TA projects (13 out of 17 TA projects). (ii) For the GMS Program, the largest allocation was for the Phnom Penh Plan for Development Management (PPP), which accounted for 64.4% of the total cost of the TA projects for capacity building and secretariat support. The TA projects earmarked for secretariat support accounted for 24.4% of the total. There was one TA for capacity building for national institutions involved in the GMS Program in 2001 for $500,000. (iii) In BIMP-EAGA and IMT-GT, the TA projects for secretariat support accounted for 65.6% of the total TA amount for capacity building and secretariat support. There were two TA projects for strengthening the national secretariats in the Philippines (1996) and Indonesia (2004).

Conclusions

Based on the foregoing analysis, the following conclusions can be made:

(i) There were very few TA projects for capacity building of the national secretariats of the four groupings for the purpose of improving in-country coordination of related initiatives.2 Some efforts along this line were undertaken as part of an umbrella GMS TA, but this was limited in scope and time frame. (ii) Some TA projects were designed to assist the secretariats of the four subregional groupings, but such assistance did not specifically and explicitly provide for improving coordination among regional and/orsubregional initiatives. Capacity building TA projects in ASEAN were for the most part directed toward supporting economic and financial surveillance process. (iii) There has been no capacity building TA which directly addresses the need to improve coordination and links among ASEAN, GMS, BIMP-EAGA, and IMT-GT.

A good case can, therefore, be made for considering TA projects directed toward (i) strengthening capacity and improving institutional arrangements and mechanisms for coordination among the secretariats of ASEAN, GMS, BIMP-EAGA, and IMT-GT;3 and (ii) strengthening capacity for in-country coordination of regional and subregional initiatives.4

2 Based on a review of the projects under the Initiative for ASEAN Integration (IAI) Work Plan as of September 2005, it appears that no capacity building project specifically designed for strengthening Cambodia, the Lao People’s Democratic Republic, Myanmar, and Viet Nam (CLMV) secretariats had been approved and/or implemented as of that date. Information on the IAI Work Plan for the more recent period is not yet available, but it is quite probable that the situation has not changed. See R. Severino. 2005. “The initiative for ASEAN Integration: Mid-Term Review of the Work Plan.” Final Report. Jakarta. 3 This would help implement the Master Plan on ASEAN Connectivity directive to establish a coordinating mechanism and structure among the ASEAN Secre- tariat; and those of the GMS, BIMP-EAGA, and IMT-GT. 4 This will have to be conducted on a selective basis, with priority to CLMV (Cambodia, the Lao People’s Democratic Republic, Myanmar, and Viet Nam) and other countries where assistance is clearly needed.

Review of ADB-Supported Capacity Building Technical AssistancappendixE 107 Regional and Subregional Program Links Mapping the Links Between ASEAN and the GMS, BIMP-EAGA, and IMT-GT

This report presents an assessment of the links among ASEAN and the three subregional programs (Greater Mekong Subregion [GMS], Brunei Darussalam–Indonesia–Malaysia– Philippines East ASEAN Growth Area [BIMP-EAGA], Indonesia–Malaysia–Thailand Growth Triangle [IMT-GT], and the Association of Southeast Asian Nations [ASEAN]) and is the first study that explicitly maps and analyzes the strategic program and institutional links among the three subregional programs and ASEAN. The report is based on desk reviews of official documents; national consultations with governments and private stakeholders; consultations with the secretariats of the three programs and ASEAN; commissioned studies by Asian Development Bank and other international organizations; and independent assessments by academics, practitioners, and research institutions by academics, practitioners, and research institutions.

About the Asian Development Bank

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Based in Manila, ADB is owned by 67 members, including 48 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance.

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